UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

                                   (Mark One)

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
     ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2002

                                       OR

[ ]  TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR  15(D)  OF THE  SECURITIES
     EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM _________ TO _________

                        Commission file number: 333-51240

                                HORIZON PCS, INC.
             (Exact name of Registrant as specified in its charter)

            DELAWARE                                    31-1707839
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization)


            68 EAST MAIN STREET
             CHILLICOTHE, OHIO                       45601-0480
 (Address of principal executive offices)            (Zip Code)

                                 (740) 772-8200
              (Registrant's telephone number, including area code)



Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.
Yes [X]     No[  ]


As of April  30,  2002,  there  were  26,646  shares  of  class A  common  stock
outstanding and 58,445,288 shares of class B common stock outstanding.

<PAGE>

                                   HORIZON PCS
                                    FORM 10-Q
                              FIRST QUARTER REPORT

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
<S>                                                                                                     <C>
                                                                                                        Page
PART I FINANCIAL INFORMATION

  ITEM 1.    Financial Statements:

             Condensed Consolidated Balance Sheets as of March 31, 2002 (unaudited),
             and December 31, 2001........................................................................1

             Condensed Consolidated Statements of Operations for the Three Months Ended
             March 31, 2002 and 2001 (unaudited)..........................................................3


             Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three Months Ended
             March 31, 2002 and 2001 (unaudited)..........................................................4

             Condensed Consolidated Statements of Cash Flows for the Three Months Ended
             March 31, 2002 and 2001 (unaudited)..........................................................5

             Notes to the Interim Condensed Consolidated Financial Statements (unaudited) ................6


  ITEM 2.    Management's Discussion and Analysis of Financial Condition and Results of Operations.......13

  ITEM 3.    Quantitative and Qualitative Disclosures About Market Risk..................................24


PART II           OTHER INFORMATION


  ITEM 1.    Legal Proceedings...........................................................................26

  ITEM 2.    Changes in Securities and Use of Proceeds...................................................26

  ITEM 3.    Defaults Upon Senior Securities.............................................................26

  ITEM 4.    Submission of Matters to a Vote of Security Holders.........................................26

  ITEM 5.    Other Information...........................................................................26

  ITEM 6.    Exhibits and Reports on Form 8-K............................................................40
</TABLE>

     Horizon  PCS,  Inc.  ("Horizon  PCS") is the issuer of 14% Senior  Discount
Notes due 2010  ("discount  notes").  In March 2001, the discount notes were the
subject of an  exchange  offer  which was  registered  with the  Securities  and
Exchange Commission ("SEC") (Registration No. 333-51238). The Co-Registrants are
Horizon   Personal   Communications,   Inc.   ("HPC"),   and   Bright   Personal
Communications  Services,  LLC  ("Bright  PCS"),   collectively  the  "Operating
Companies,"  which are  wholly-owned  subsidiaries  of Horizon PCS.  Each of the
Operating  Companies  has  provided  a full,  unconditional,  joint and  several
guaranty of Horizon PCS' obligations  under the discount notes.  Horizon PCS has
no operations separate from its investment in the Operating Companies.  Pursuant
to Rule 12h-5 of the  Securities  Exchange  Act of 1934,  no separate  financial
statements and other disclosures  concerning the Operating  Companies other than
narrative  disclosures  set  forth in the  Notes to the  Consolidated  Financial
Statements  have been  presented  herein.  Concurrent  with the  offering of the
discount notes discussed above,  Horizon PCS issued 295,000 warrants to purchase
up to 3,805,000  shares of Horizon PCS' class A common stock.  The warrants were
registered with the SEC (Registration No. 333-51240).  As used herein and except
as the  context  otherwise  may  require,  the  "Company,"  "we," "us," "our" or
"Horizon  PCS"  means,  collectively,  Horizon  PCS,  Inc.,  and  the  Operating
Companies.


                                       i
<PAGE>

                          PART 1. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

HORIZON PCS, INC.

Condensed Consolidated Balance Sheets
As of March 31, 2002, and December 31, 2001
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
<S>                                                                            <C>               <C>
                                                                                   March 31,       December 31,
                                                                                     2002              2001
                                                                               ----------------  ---------------
                                                                                 (unaudited)
ASSETS
------
CURRENT ASSETS:
  Cash and cash equivalents (includes $105,000,000 on deposit
    in accordance with waiver agreement in 2002.  See Note 9)................. $   195,870,817   $   123,775,562
  Restricted cash.............................................................      24,597,222        24,597,222
  Accounts receivable-- subscriber, less allowance for
    doubtful accounts of approximately $1,878,000 and $1,804,000 at
    March 31, 2002 and December 31, 2001, respectively........................      17,315,739        14,293,771
  Receivable from affiliate...................................................          99,451           100,437
  Receivable from Parent......................................................              --           483,785
  Equipment inventory.........................................................       1,802,381         3,845,433
  Prepaid expenses and other current assets...................................       2,671,494           840,970
                                                                               ---------------   ---------------
        Total current assets..................................................     242,357,104       167,937,180
                                                                               ---------------   ---------------

OTHER ASSETS:
  Restricted cash.............................................................      24,062,500        24,062,500
  Intangible asset-- Sprint PCS licenses, net of amortization.................      42,225,701        42,840,534
  Goodwill, net of amortization...............................................       7,191,180         7,191,180
  Unamortized debt issuance costs and other assets............................      23,227,707        24,438,992
                                                                               ---------------   ---------------
        Total other assets....................................................      96,707,088        98,533,206
                                                                               ---------------   ---------------

PROPERTY AND EQUIPMENT, NET                                                        230,290,376       214,867,858
                                                                               ---------------   ---------------

            Total assets...................................................... $   569,354,568   $   481,338,244
                                                                               ===============   ===============
</TABLE>



(Continued on next page)


                                       1
<PAGE>

HORIZON PCS, INC.

Condensed Consolidated Balance Sheets (Continued)
As of March 31, 2002, and December 31, 2001
--------------------------------------------------------------------------------


<TABLE>
<CAPTION>
<S>                                                                            <C>               <C>
                                                                                   March 31,       December 31,
                                                                                     2002              2001
                                                                               ----------------  ----------------
                                                                                 (unaudited)

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
----------------------------------------------
CURRENT LIABILITIES:

  Accounts payable............................................................ $     8,544,723   $      9,500,931
  Accrued liabilities.........................................................      34,881,585         27,527,462
  Payable to Sprint PCS.......................................................      16,892,532         10,244,529
  Deferred service revenue....................................................       4,326,977          3,712,734
                                                                               ---------------   ----------------
        Total current liabilities.............................................      64,645,817         50,985,656
                                                                               ---------------   ----------------

OTHER LONG-TERM LIABILITIES:
  Long-term debt..............................................................     495,410,215       384,055,643
  Other long-term liabilities.................................................       2,252,524         2,195,355
  Deferred income.............................................................       9,847,400        10,719,888
                                                                               ---------------   ---------------
        Total other long-term liabilities.....................................     507,510,139       396,970,886
                                                                               ---------------   ---------------
          Total liabilities...................................................     572,155,956       447,956,542
                                                                               ---------------   ---------------

COMMITMENTS AND CONTINGENCIES (Note 6)

CONVERTIBLE PREFERRED STOCK...................................................     148,205,412       145,349,043


STOCKHOLDERS' EQUITY (DEFICIT):

  Preferred stock, 10,000,000 shares authorized, none issued
    or outstanding, at $0.0001 par value......................................              --                 --
  Common stock-- class A, 300,000,000 shares authorized,
    26,646 issued and outstanding at $0.0001 par value........................               3                  3
  Common stock-- class B, 75,000,000 shares authorized,
    58,458,354 issued and 58,445,288 outstanding, at $0.0001 par value........           5,846              5,846
  Treasury stock-- class B, 13,066 shares, at $8.50 per share.................        (111,061)          (111,061)
  Accumulated other comprehensive income (loss)...............................        (447,908)          (837,851)
  Additional paid-in capital..................................................      91,852,117         91,852,117
  Deferred stock option compensation..........................................      (1,389,259)        (1,566,496)
  Retained deficit............................................................    (240,916,538)      (201,309,899)
                                                                               ---------------   ----------------

          Total stockholders' equity (deficit)................................    (151,006,800)      (111,967,341)
                                                                               ---------------   ----------------
            Total liabilities and stockholders' equity (deficit).............. $   569,354,568   $    481,338,244
                                                                               ===============   ================
</TABLE>


The  accompanying  notes are an integral  part of these  condensed  consolidated
financial statements



                                       2
<PAGE>

HORIZON PCS, INC.

Condensed Consolidated Statements of Operations
For the Three Months Ended March 31, 2002 and 2001 (unaudited)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
<S>                                                                             <C>               <C>
                                                                                    For the Three Months Ended
                                                                                             March 31,
                                                                                      2002              2001
                                                                                ----------------  ----------------
OPERATING REVENUES:
  Subscriber revenues.....................................................      $     35,015,205  $     12,063,233
  Roaming revenues........................................................            10,819,288         6,114,459
  Equipment revenues......................................................             2,375,289         1,075,965
                                                                                ----------------  ----------------
         Total operating revenues.........................................            48,209,782        19,253,657

OPERATING EXPENSES:
  Cost of service (exclusive of items shown below)........................            35,750,809        17,981,365
  Cost of equipment.......................................................             4,919,595         2,189,910
  Selling and marketing...................................................            14,707,221         7,096,031
  General and administrative (exclusive of items shown below).............             9,175,049         4,589,000
  Non-cash compensation...................................................               177,237           177,237
  Depreciation and amortization...........................................             7,949,631         3,414,043
                                                                                ----------------  ----------------
         Total operating expenses.........................................            72,679,542        35,447,586
                                                                                ----------------  ----------------

OPERATING LOSS............................................................           (24,469,760)      (16,193,929)

Loss on sale of property and equipment....................................              (285,738)               --
Interest income and other, net............................................               743,636         2,886,220
Interest expense, net of capitalized interest.............................           (12,738,408)       (6,150,947)
                                                                                ----------------  ----------------

LOSS ON OPERATIONS BEFORE INCOME TAXES....................................           (36,750,270)      (19,458,656)

INCOME TAX EXPENSE........................................................                    --                --
                                                                                ----------------  ----------------

NET LOSS..................................................................           (36,750,270)      (19,458,656)

PREFERRED STOCK DIVIDEND..................................................            (2,856,369)       (2,635,623)
                                                                                ----------------  ----------------

NET LOSS AVAILABLE TO COMMON STOCKHOLDERS.................................      $    (39,606,639) $    (22,094,279)
                                                                                ================  ================

Basic and diluted net loss per share available to common stockholders.....      $         (0.68)  $          (0.38)
                                                                                ===============   ================
Weighted-average common shares outstanding................................            58,471,934        58,471,934
                                                                                ================  ================
</TABLE>

The  accompanying  notes are an integral  part of these  condensed  consolidated
financial statements


                                       3
<PAGE>

HORIZON PCS, INC.

Condensed Consolidated Statements of Comprehensive Income (Loss)
For the Three Months Ended March 31, 2002 and 2001 (unaudited)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
<S>                                                                             <C>               <C>
                                                                                    For the Three Months Ended
                                                                                             March 31,
                                                                                      2002              2001
                                                                                ----------------  ----------------

NET LOSS..................................................................      $    (36,750,270) $    (19,458,656)

OTHER COMPREHENSIVE INCOME (LOSS):
  Net unrealized gain (loss) on hedging activities........................               389,943          (298,905)
                                                                                ----------------  ----------------

COMPREHENSIVE INCOME (LOSS)...............................................      $    (36,360,327) $    (19,757,561)
                                                                                ================  ================
</TABLE>

The  accompanying  notes are an integral  part of these  condensed  consolidated
financial statements


                                       4
<PAGE>


HORIZON PCS, INC.

Condensed Consolidated Statements of Cash Flows
For the Three Months Ended March 31, 2002 and 2001 (unaudited)
--------------------------------------------------------------------------------


<TABLE>
<CAPTION>
<S>                                                                             <C>               <C>
                                                                                    For the Three Months Ended
                                                                                             March 31,
                                                                                      2002              2001
                                                                                ----------------  ----------------
CASH FLOWS FROM OPERATING ACTIVITIES
  Net Loss................................................................      $    (36,750,270) $    (19,458,656)
                                                                                ----------------  ----------------
Adjustments to reconcile net loss to net cash used in operating activities:
  Depreciation and amortization...........................................             7,949,631         3,414,043
  Non-cash compensation expense...........................................               177,237           177,237
  Non-cash interest expense...............................................             6,118,482         4,490,700
  Provision for doubtful accounts.........................................             3,511,642           730,720
  Loss on hedging activities..............................................                34,103                --
  Loss on sale of property and equipment..................................               285,738                --
  Change in:..............................................................
    Accounts receivable...................................................            (6,533,610)       (2,698,156)
    Equipment inventory...................................................             2,043,052           981,829
    Prepaid expenses and other............................................            (1,830,524)           44,710
    Deferred income.......................................................              (872,488)          849,397
    Accounts payable......................................................              (956,208)        1,591,756
    Payable to Sprint PCS.................................................             6,648,003          (774,336)
    Accrued liabilities and deferred service revenue......................             7,968,366        (8,263,720)
  Change in receivable/payable from affiliates and Parent.................               484,771          (247,656)
  Change in other assets and liabilities, net.............................             1,002,160          (487,969)
                                                                                ----------------  ----------------
    Total adjustments.....................................................            26,030,355          (191,445)
                                                                                ----------------  ----------------
      Net cash used in operating activities...............................           (10,719,915)      (19,650,101)
                                                                                ----------------  ----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Capital expenditures, net...............................................           (23,438,012)      (32,053,689)
  Cash Investments........................................................                    --       (31,976,767)
  Proceeds from redemption of RTFC capital certificates...................                    --         2,895,646
  Proceeds from sale of property and equipment............................             1,253,182                --
  Dividends received .....................................................                    --            (4,311)
                                                                                ----------------  -----------------
      Net cash used in investing activities...............................           (22,184,830)      (61,139,121)
                                                                                ----------------  ----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Deferred financing fees and other.......................................                    --           (41,915)
  Long Term Debt-- borrowings, net of repayments..........................           105,000,000                --
                                                                                ----------------  ----------------
      Net cash provided by financing activities...........................           105,000,000           (41,915)
                                                                                ----------------  ----------------
NET INCREASE (DECREASE) IN CASH AND CASH
  EQUIVALENTS.............................................................            72,095,255       (80,831,137)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD............................           123,775,562       191,417,394
                                                                                ----------------  ----------------
CASH AND CASH EQUIVALENTS, END OF PERIOD..................................      $    195,870,817  $    110,586,257
                                                                                ================  ================
</TABLE>

The  accompanying  notes are an integral  part of these  condensed  consolidated
financial statements


                                       5
<PAGE>

HORIZON PCS, INC.

Notes to Interim Condensed Consolidated Financial Statements
As of March 31, 2002, and December 31, 2001,
And for the Three Months Ended March 31, 2002 and 2001 (unaudited)
--------------------------------------------------------------------------------

NOTE 1 - GENERAL

     The results of operations for the interim periods shown are not necessarily
indicative  of the results to be expected for the fiscal year. In the opinion of
management,  the information contained herein reflects all adjustments necessary
to make a fair  statement  of the results for the three  months  ended March 31,
2002 and  2001.  All such  adjustments  are of a normal  recurring  nature.  The
financial  information  presented  herein should be read in conjunction with the
Company's  Form  10-K for the year  ended  December  31,  2001,  which  includes
information and disclosures not presented herein.


NOTE 2 - ORGANIZATION AND BUSINESS OPERATIONS

     On April 26, 2000,  Horizon  Telcom,  Inc.  ("Parent" or "Horizon  Telcom")
formed  Horizon  PCS,  Inc. The Company  primarily  provides  wireless  personal
communications  services  ("PCS") as an  affiliate  of Sprint  PCS.  The Company
entered  into  management  agreements  with Sprint PCS,  the PCS group of Sprint
Corporation,  during 1998 and 1999. These  agreements,  as amended,  provide the
Company with the exclusive right to build,  own, and manage a wireless voice and
data  services  network in markets  located in Ohio,  West  Virginia,  Kentucky,
Virginia,  Tennessee,  Maryland,  Pennsylvania,  New York, New Jersey, Michigan,
North  Carolina and Indiana under the Sprint PCS brand.  The Company is required
to build the wireless network according to Sprint PCS  specifications.  The term
of the agreements is twenty years with three successive ten-year renewal periods
unless  terminated by either party under  provisions  outlined in the management
agreements.  The management  agreements  commenced in June 1998, but payments of
the  management  fee did not  commence  until the Company  converted  to a fully
branded Sprint PCS network  partner in October 1999.  The management  agreements
include  indemnification clauses between the Company and Sprint PCS to indemnify
each party against  claims  arising from  violations  of laws or the  management
agreements,   other  than  liabilities  resulting  from  negligence  or  willful
misconduct of the party seeking to be indemnified.


NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Note 3 in the Notes to Consolidated  Financial  Statements in the Company's
Annual Report on Form 10-K for the year ended  December 31, 2001,  describes the
Company's  significant  accounting  policies in greater  detail  than  presented
herein.


BASIS OF PRESENTATION

     The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with the rules and  regulations of the SEC.  Certain
information and footnote  disclosures  normally included in financial statements
prepared in accordance  with  generally  accepted  accounting  principles in the
United  States  have  been  condensed  or  omitted  pursuant  to such  rules and
regulations.  These  statements  include  the  accounts  of the  Company and its
wholly-owned  subsidiaries,  HPC  and  Bright  PCS.  All  material  intercompany
transactions and balances have been eliminated.



                                       6
<PAGE>

HORIZON PCS, INC.

Notes to Interim Condensed Consolidated Financial Statements
As of March 31, 2002, and December 31, 2001,
And for the Three Months Ended March 31, 2002 and 2001 (unaudited)
--------------------------------------------------------------------------------


NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

DERIVATIVE FINANCIAL INSTRUMENTS

     The  Company's  policies  do not  permit  the use of  derivative  financial
instruments  for speculative  purposes.  The Company uses interest rate swaps to
manage  interest  rate risk.  The net amount paid or  received on interest  rate
swaps is  recognized  as an  adjustment  to  interest  expense.  The Company has
adopted  SFAS No.  133,  "Accounting  for  Derivative  Instruments  and  Hedging
Activities," as amended by SFAS No. 138, "Accounting for Derivative  Instruments
and Certain Hedging  Activities."  These statements  established  accounting and
reporting  standards for  derivative  instruments  and hedging  activities  that
require an entity to recognize all derivatives as an asset or liability measured
at fair value.  Depending on the intended use of the derivative,  changes in its
fair value will be  reported  in the period of change as either a  component  of
earnings  or  a  component  of  other  comprehensive  income.  Pursuant  to  the
derivative  criteria  established  by SFAS No.  133,  an item with  exposure  to
variability in expected  future cash flows that is  attributable to a particular
risk is  considered a cash flow hedge.  The exposure may be  associated  with an
existing  recognized  asset or  liability  such as future  interest  payments on
variable-rate debt.


NET LOSS PER SHARE

     The Company  computes net loss per common share in accordance with SFAS No.
128,  "Earnings  per Share" and SAB No. 98. Basic and diluted net loss per share
available to common  stockholders  is computed by dividing net loss available to
common stockholders for each period by the  weighted-average  outstanding common
shares.  No  conversion  of  common  stock  equivalents  (options,  warrants  or
convertible  securities) has been assumed in the  calculations  since the effect
would be antidilutive.  As a result, the number of weighted-average  outstanding
common  shares as well as the amount of net loss per share is the same for basic
and diluted net loss per share calculations for all periods presented. There are
three  items that  could  potentially  dilute  basic  earnings  per share in the
future.  These  items  include  the common  stock  options,  the stock  purchase
warrants and the convertible  preferred  stock.  These items will be included in
the diluted earnings per share calculation when dilutive.


RECENT ACCOUNTING PRONOUNCEMENTS

     In July 2001, the Financial Accounting Standards Board ("FASB") issued SFAS
No.  141,  "Business  Combinations"  and  SFAS  No.  142,  "Goodwill  and  Other
Intangible  Assets." SFAS No. 141 addresses  financial  accounting and reporting
for all  business  combinations  and  requires  that all  business  combinations
entered into subsequent to June 2001 be recorded under the purchase method. This
statement  also  addresses  financial  accounting and reporting for goodwill and
other intangible assets acquired in a business combination at acquisition.  SFAS
No. 142 addresses  financial  accounting  and reporting  for  intangible  assets
acquired  individually  or with a group of other  assets  at  acquisition.  This
statement  also  addresses  financial  accounting and reporting for goodwill and
other intangible assets subsequent to their acquisition.

These  statements  were  adopted by the  Company  on  January 1, 2002.  Goodwill
amortization  ceased as of  December  31,  2001,  and the Company is required to
complete an impairment test of the remaining  goodwill balance annually (or more
frequently if impairment  indicators  arise). The Company has not yet determined
the  financial  impact the  adoption  of these  pronouncements  will have on its
financial  position or results of operations.  As of March 31, 2002, the Company
has  goodwill of  approximately  $7,191,000,  net of  accumulated  amortization,
related to the  acquisition  of Bright PCS. The Company will  complete the first
step of the impairment test by June 30, 2002,  and, if necessary,  will complete
the second step by December 31, 2002.


                                       7
<PAGE>

HORIZON PCS, INC.

Notes to Interim Condensed Consolidated Financial Statements
As of March 31, 2002, and December 31, 2001,
And for the Three Months Ended March 31, 2002 and 2001 (unaudited)
--------------------------------------------------------------------------------


NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     In June  2001,  the  FASB  issued  SFAS  No.  143,  "Accounting  for  Asset
Retirement  Obligations."  This  statement  addresses  financial  accounting and
reporting for obligations associated with the retirements of tangible long-lived
assets  and  the  associated  asset  retirement   costs.  It  applies  to  legal
obligations associated with the retirement of long-lived assets that result from
the  acquisition,  construction,  development and (or) the normal operation of a
long-lived  asset.  The Company will adopt this statement  effective  January 1,
2003.  The adoption is not expected to have a material  effect on the  Company's
financial position, results of operations or cash flows.

In August 2001, the FASB issued SFAS No. 144,  "Accounting for the Impairment or
Disposal of Long-Lived Assets." SFAS No. 144 addresses financial  accounting and
reporting for the impairment of long-lived assets. The statement supersedes SFAS
No. 121,  "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of," and the  accounting  and reporting  provisions of APB
Opinion  No. 30. SFAS No. 144 removes  goodwill  from its scope,  as goodwill is
addressed in the impairment test described above under SFAS No. 142. The Company
adopted  SFAS No. 144 on January 1, 2002.  The  adoption did not have a material
effect on the Company's financial position, results of operations or cash flows.


RECLASSIFICATIONS

     Certain prior year amounts have been  reclassified to conform with the 2002
presentation.

NOTE 4 - PROPERTY AND EQUIPMENT

     Property and  equipment  consists of the  following at March 31, 2002,  and
December 31, 2001:

<TABLE>
<CAPTION>
<S>                                                                 <C>               <C>
                                                                          2002              2001
                                                                    ---------------   ---------------
Network assets...................................................   $   135,254,093   $   134,257,788
Switching equipment..............................................        53,718,806        35,253,986
Furniture, vehicles and office equipment.........................         9,310,485        10,137,175
Land.............................................................           966,689           966,689
                                                                    ---------------   ---------------
    Property and equipment in service, cost......................       199,250,073       180,615,638
Accumulated depreciation.........................................       (23,462,536)      (22,478,697)
                                                                    ---------------   ---------------
        Property and equipment in service, net...................       175,787,537       158,136,941
Construction work in progress....................................        54,502,839        56,730,917
                                                                    ---------------   ---------------
            Total property and equipment, net....................   $   230,290,376   $   214,867,858
                                                                    ===============   ===============
</TABLE>

     The Company capitalized interest of approximately $2,090,000 and $1,550,000
for the three months ended March 31, 2002, and 2001, respectively.



                                       8
<PAGE>

HORIZON PCS, INC.

Notes to Interim Condensed Consolidated Financial Statements
As of March 31, 2002, and December 31, 2001,
And for the Three Months Ended March 31, 2002 and 2001 (unaudited)
--------------------------------------------------------------------------------


NOTE 5 - LONG-TERM DEBT

     The  components  of  long-term  debt  outstanding  at March 31,  2002,  and
December 31, 2001, are as follows:
<TABLE>
<CAPTION>
<S>                                         <C>                  <C>              <C>
                                            Interest Rate at
                                             March 31, 2002            2002             2001
                                             --------------      ---------------  ---------------

Senior notes.....................................13.75%          $   175,000,000  $   175,000,000
Discount notes, net of discount. ................14.00%              165,410,215      159,055,643
Secured credit facility - term loan B............6.30%                50,000,000       50,000,000
Secured credit facility - term loan A............5.75%               105,000,000               --
                                                                 ---------------  ---------------

    Total long-term debt...........................              $   495,410,215  $   384,055,643
                                                                 ===============  ===============

</TABLE>

     As of March 31 2002,  Horizon PCS had $95.0 million available for borrowing
under the Company's secured credit facility in the form of a line of credit at a
variable interest rate of 5.78%.

     In connection with the Company's  December 2001 offering of $175,000,000 of
senior notes due in 2011,  approximately  $48,660,000  of the offering  proceeds
were placed in an escrow  account to be used  toward the first four  semi-annual
interest  payments  due  under the terms of the  notes.  The first two  interest
payments have been classified as short-term.


NOTE 6 - COMMITMENTS AND CONTINGENCIES

OPERATING LEASES

     The  Company  leases  office  space and  various  equipment  under  several
operating  leases.  In addition,  the Company has a tower lease agreement with a
third party  whereby  the Company  leases  towers for  substantially  all of the
Company's cell sites.  The tower leases are operating leases with a term of five
to ten years  with  three  consecutive  five-year  renewal  option  periods.  In
addition,  the Company receives a site development fee from the tower lessor for
certain tower sites which the lessor constructs on behalf of the Company.

     The Company also leases space for its retail stores. At March 31, 2002, the
Company leased 39 stores operating throughout its territories.

CONSTRUCTION EXPENDITURES

     Construction  expenditures  for the  year  ended  December  31,  2002,  are
estimated to be between approximately $60,000,000 and $70,000,000.  The majority
of the estimated expenditures are for the build-out and upgrade of the Company's
PCS network.


LEGAL MATTERS

     The  Company  is party to legal  claims  arising  in the  normal  course of
business.  Although the ultimate  outcome of the claims cannot be ascertained at
this time,  it is the opinion of  management  that none of these  matters,  when
resolved,  will have a  material  adverse  impact on the  Company's  results  of
operations, cash flows or financial condition.




                                       9
<PAGE>

HORIZON PCS, INC.

Notes to Interim Condensed Consolidated Financial Statements
As of March 31, 2002, and December 31, 2001,
And for the Three Months Ended March 31, 2002 and 2001 (unaudited)
--------------------------------------------------------------------------------


NOTE 6 - COMMITMENTS AND CONTINGENCIES (CONTINUED)

GUARANTEES

     The discount notes are guaranteed by the Company's  existing  subsidiaries,
HPC and Bright PCS, and will be  guaranteed  by the  Company's  future  domestic
restricted  subsidiaries.  The Company has no  independent  assets or operations
apart from its subsidiaries.  The guarantees are general unsecured  obligations.
Each guarantor  unconditionally  guarantees,  jointly and severally, on a senior
subordinated  basis,  the full and  punctual  payment of  principal  premium and
liquidated  damages, if any, and interest on the discount notes when due. If the
Company creates or acquires  unrestricted  subsidiaries  and foreign  restricted
subsidiaries, these subsidiaries need not be guarantors.


ALLIANCES NETWORK AGREEMENTS

     The Alliances are two independent PCS providers  offering service under the
NTELOS brand name. In August 1999, the Company  entered into a network  services
agreement  with  the  Alliances  for 13 of its  markets  in  Virginia  and  West
Virginia.  The initial term is through June 8, 2008 with four automatic ten-year
renewals.  This  agreement was amended in the third  quarter of 2001.  Under the
amended  agreement,  Horizon PCS is obligated to pay fixed minimum  monthly fees
until December 2003, at a lower rate per minute than the prior agreement.  Usage
in excess of the monthly minute allowance is charged at a set rate per minute.

     Under the amendment,  the Alliances are obligated to make certain  upgrades
to their network (3G  technology)  and the  Alliances  agreed with Sprint PCS to
modify  their  network to cause  Sprint PCS to be in  compliance  with the FCC's
construction  requirements  for PCS  networks.  Horizon PCS is  responsible  for
completion of the network modification if the Alliances fail to comply.


NOTE 7 - RELATED PARTIES

     The Company has  non-interest-bearing  receivables from affiliate companies
(other  subsidiaries  of the Parent)  related to advances  made to and  services
received from these affiliated companies.  At December 31, 2001, the Company had
a receivable  from the Parent related to Federal income taxes.  The balances due
to and due from related parties as of March 31, 2002, and December 31, 2001, are
as follows:

<TABLE>
<CAPTION>
<S>                                                          <C>                <C>
                                                                 March 31,        December 31,
                                                                   2002               2001
                                                             -----------------  ---------------
Receivable from affiliates................................   $         99,451   $       100,437
Receivable from Parent....................................                 --           483,785
</TABLE>

     During the three months ended March 31, 2002 and 2001, affiliated companies
provided  the  Company  management,   supervision  and  administrative  services
including  financial,  regulatory,  human resource and other  administrative and
support services. These agreements have a term of three years, with the right to
renew the agreement for additional one-year terms each year thereafter. The cost
of the  management  services for the three months ended March 31, 2002 and 2001,
was approximately $1,420,000 and $1,612,000, respectively.



                                       10
<PAGE>

HORIZON PCS, INC.

Notes to Interim Condensed Consolidated Financial Statements
As of March 31, 2002, and December 31, 2001,
And for the Three Months Ended March 31, 2002 and 2001 (unaudited)
--------------------------------------------------------------------------------


NOTE 8 - GOODWILL AND INTANGIBLE ASSETS

     The Company  adopted  SFAS No. 142 on January 1, 2002 (Note 3). As a result
of the adoption,  goodwill  amortization ceased as of December 31, 2001, and the
Company is required to complete an  impairment  test of the  remaining  goodwill
balance  annually (or more  frequently  if  impairment  indicators  arise).  The
following  discusses the Company's  goodwill and intangible  assets presented on
the condensed consolidated balance sheets.

     During 2000,  the Company agreed to grant to Sprint PCS warrants to acquire
2,510,460  shares of class A common  stock in exchange  for the right to service
PCS  markets  in  additional  areas.  By  September  30,  2000,  Sprint  PCS had
substantially  completed  its  obligations  under the  agreement and the Company
completed the required purchase of certain Sprint PCS assets. The Company valued
the warrants and recorded an intangible asset of approximately $13,356,000.  The
intangible  asset is being  amortized  over the remaining term of the Sprint PCS
management agreement resulting in approximately $752,000 of amortization expense
per year  through June 2018.  Accumulated  amortization  at March 31, 2002,  was
approximately $1,129,000.

     During 1999 the Company entered into a joint venture  agreement through the
purchase of 25.6% of Bright  PCS. On June 27,  2000,  the Company  acquired  the
remaining  74.4% of Bright  PCS.  The  total  purchase  price was  approximately
$49,300,000  and was treated as a purchase  method  acquisition  for  accounting
purposes.  In conjunction with this  transaction,  the Company also acquired the
Bright PCS  management  agreement  with  Sprint  PCS and,  with it, the right to
operate  using  Sprint PCS  licenses  in Bright  PCS'  markets.  The Company has
recognized an intangible  asset totaling  approximately  $33,000,000  related to
this licensing  agreement  which is being  amortized over 20 years,  the initial
term of the underlying  management  agreement,  resulting in annual amortization
expense of $1,707,000  through October 2019.  Accumulated  amortization at March
31, 2002, was approximately $3,001,000.

     The  purchase  price  exceeded  the fair  market  value  of the net  assets
acquired by approximately $7,778,000.  The resulting goodwill was amortized on a
straight-line  basis over 20 years until  December 31, 2001.  At March 31, 2002,
the remaining unamortized balance of goodwill was approximately $7,191,000.

     The following pro forma disclosure  reconciles net loss available to common
shareholders, as presented on the accompanying condensed consolidated statements
of operations, excluding the effect of goodwill amortization:
<TABLE>
<CAPTION>
<S>                                               <C>                  <C>
                                                        Three Months Ended March 31,
                                                         2002                 2001
                                                  ------------------   ------------------

Reported net loss...............................  $      (36,750,270)  $      (19,458,656)
Goodwill amortization...........................                  --               97,221
                                                  ------------------   ------------------
   Adjusted net loss ...........................  $      (36,750,270)  $      (19,361,435)
                                                  ==================   ==================

Basic and diluted net loss per share available
   to common stockholders.......................  $            (0.68)  $            (0.38)
Goodwill amortization...........................                  --                   --
                                                  ------------------   ------------------
   Adjusted basic and diluted net loss per
     share available to common stockholders.....  $            (0.68)  $            (0.38)
                                                  ==================   ==================
</TABLE>




                                       11
<PAGE>

HORIZON PCS, INC.

Notes to Interim Condensed Consolidated Financial Statements
As of March 31, 2002, and December 31, 2001,
And for the Three Months Ended March 31, 2002 and 2001 (unaudited)
--------------------------------------------------------------------------------


NOTE 9 - SECURED CREDIT FACILITY COVENANTS

     Horizon PCS' secured credit facility includes financial covenants that must
be met each  quarter.  The Company did not meet the  covenant for EBITDA for the
first  quarter  of 2002.  As a result  of  higher  than  expected  gross and net
additions  to Horizon PCS  subscribers  for the  quarter,  the Company  incurred
additional  expenses to add those  customers.  Although  the Company  ultimately
benefits  from the revenues  generated by new  subscribers,  the Company  incurs
one-time  expenses  associated  with  new  subscribers,  including  commissions,
handset  subsidies,  set up costs for the network and marketing  expenses.  As a
result,  these new subscriber costs  negatively  affect EBITDA in the short-term
during  the  period  of  the   addition  of  new   subscribers,   which  led  to
non-compliance with the EBITDA covenant for the first quarter of 2002.

     On May 9,  2002,  the  Company  entered  into a waiver  agreement  with its
lending group  waiving this  non-compliance  with the covenant  through June 15,
2002.  The Company also agreed that until June 15, 2002,  the Company  would not
borrow funds under the $95,000,000 facility so long as cash and cash equivalents
(excluding  restricted  cash)  exceeds  $10,000,000  and that the Company  would
maintain the  $105,000,000 in loan proceeds  recently  received from the lending
group in a separate  account.  The Company is currently in negotiations with the
bank  group to obtain  amendments  to the  covenants.  The  Company  anticipates
finalizing these amendments by June 15, 2002.

     The failure to comply with the covenant  was an event of default  under the
secured credit  facility,  and will give the lender the right to pursue remedies
if  Horizon  PCS is unable to agree on the  amendment  by June 15,  2002.  These
remedies could include  acceleration  of amounts due under the facility.  If the
lender elected to accelerate  the  indebtedness  under the facility,  this would
also  represent a default under the  indentures of the senior notes and discount
notes.  One option  available to the Company would be to prepay the indebtedness
under the secured credit facility, together with prepayment fees. If the Company
prepaid the facility  prior to  acceleration,  the Company  would avoid  default
under the  indentures for the senior notes and discount  notes.  In the event of
such a  prepayment,  the  Company  believes  that it  could  obtain  replacement
financing to the extent  necessary to fund its  business  plan.  There can be no
assurance, however, that the Company could obtain adequate or timely replacement
financing on acceptable terms, or at all.




                                       12
<PAGE>


ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

     The following  discussion and analysis  should be read in conjunction  with
the consolidated financial statements and the related notes.

                           FORWARD-LOOKING STATEMENTS

     This  quarterly  report on Form 10-Q  includes  forward-looking  statements
within the meaning of Section 27A of the Securities Act of 1933, as amended (the
Securities  Act),  and Section 21E of the  Securities  Exchange Act of 1934,  as
amended  (the   Exchange   Act),   which  can  be   identified  by  the  use  of
forward-looking   terminology  such  as:  "may,"  "might,"   "could,"   "would,"
"believe,"  "expect,"  "intend,"  "plan,"  "seek,"   "anticipate,"   "estimate,"
"project," or "continue," or the negative thereof or other variations thereon or
comparable terminology.  All statements other than statements of historical fact
included in this quarterly report on Form 10-Q,  including  without  limitation,
the statements under "ITEM 2. Management's  Discussion and Analysis of Financial
Condition and Results of Operations" and under "ITEM 5. Other  Information"  and
elsewhere   herein   regarding   our   financial   position  and  liquidity  are
forward-looking  statements.  These forward-looking statements also include, but
are not limited to:

o    estimates of current and future population for our markets;

o    forecasts  of  growth in the  number  of  consumers  and  businesses  using
     personal communication services;

o    statements  regarding  our plans for and costs of the  build-out of our PCS
     network;

o    statements regarding our anticipated  revenues,  expense levels,  liquidity
     and capital resources and projections of when we will launch commercial PCS
     and achieve break-even or positive operating cash flow, and

o    the anticipated impact of recent accounting pronouncements.

     Although  we believe the  expectations  reflected  in such  forward-looking
statements are reasonable, we can give no assurance such expectations will prove
to have been correct. Important factors with respect to any such forward-looking
statements,  including certain risks and  uncertainties  that could cause actual
results to differ materially from our expectations (Cautionary Statements),  are
disclosed in this quarterly report on Form 10-Q, including,  without limitation,
in conjunction with the  forward-looking  statements  included in this quarterly
report on Form 10-Q. Important factors that could cause actual results to differ
materially from those in the forward-looking statements included herein include,
but are not limited to:

o    our  potential  need for  additional  capital  or the need for  refinancing
     existing indebtedness;

o    our  dependence on our  affiliation  with Sprint PCS and our  dependence on
     Sprint PCS' back office services;

o    the need to  successfully  complete  the  build-out  of our  portion of the
     Sprint PCS network on our anticipated schedule;

o    changes or advances in technology;

o    competition in the industry and markets in which we operate;

o    our lack of operating history and anticipation of future losses;

o    potential fluctuations in our operating results;

                                       13
<PAGE>


o    our potential  inability to expand our services and related products in the
     event of  substantial  increase  in demand for these  services  and related
     products;

o    our ability to attract and retain skilled personal;

o    changes in government regulation; and

o    general economic and business conditions.

     These   forward-looking   statements   involve  known  and  unknown  risks,
uncertainties and other factors which may cause our actual results,  performance
or achievements to be materially different from any future results,  performance
or achievements  expressed or implied by such  forward-looking  statements.  All
subsequent  written and oral  forward-looking  statements  attributable to us or
persons  acting on our behalf are expressly  qualified in their  entirety by the
Cautionary  Statements.  See "ITEM 5. Other Information" for further information
regarding several of these risks and uncertainties.


OVERVIEW

     Under our agreements  with Sprint PCS, we manage our network on Sprint PCS'
licensed  spectrum  and have the right to use the  Sprint  and  Sprint PCS brand
names. As of March 31, 2002, we had launched service covering  approximately 7.2
million  residents,  or  approximately  71%  of  the  total  population  in  our
territory, and managed approximately 222,700 customers.


HISTORY AND BACKGROUND

     Horizon PCS is a subsidiary of Horizon Telcom.  Horizon Telcom is a holding
company which, in addition to its 58.1% common stock ownership of Horizon PCS on
a fully diluted basis, owns 100% of The Chillicothe  Telephone  Company, a local
telephone  company in service  for 106 years.  Horizon  Telcom also owns 100% of
Horizon  Services,  Inc.  ("Horizon  Services"),  which provides  administrative
services to Horizon PCS and other Horizon Telcom affiliates, and 100% of Horizon
Technology,  Inc. ("Horizon Technology"),  a separate long distance and Internet
services business.  Prior to providing PCS service, we were a DirecTV affiliate.
We sold that business in 1996. We also launched an Internet services business in
1995, which we transferred to Horizon Technology in April 2000.

     The following are key milestones in our business:

     In November  1996,  we acquired PCS licenses in the Federal  Communications
Commissions'  ("FCC"s) C Block auction giving us the right to provide service to
five markets in Ohio,  West  Virginia and Kentucky  with a total  population  of
approximately  1.0  million.  In August  1997,  approximately  ten months  after
receiving  our  licenses,  we  launched  PCS service as an  independent  service
provider operating under the Horizon Personal Communications brand name. We were
the third C Block  licensee to launch PCS  service in the United  States and the
first to use CDMA technology.

     In June 1998,  we returned all of our FCC licenses  except for a portion of
the  license  covering  our  Chillicothe,  Ohio  market,  in  exchange  for  the
forgiveness of our FCC debt. In connection  with the return of our FCC licenses,
we agreed to become one of five charter Sprint PCS affiliates. Our initial grant
of markets from Sprint PCS consisted of seven markets in Ohio, West Virginia and
Kentucky  with a total  population  of  approximately  1.6  million.  This grant
included the five markets for which we  originally  held  licenses.  In November
1998, we began offering Sprint PCS service. However, we continued to use Horizon
Personal Communications as the primary brand for marketing our PCS service.


                                       14
<PAGE>


     In August 1999,  Sprint PCS granted us 17  additional  markets in Virginia,
West Virginia,  Tennessee,  Maryland,  Kentucky,  North Carolina and Ohio with a
total population of approximately  3.3 million.  In conjunction with this second
grant, we also entered into a network services  agreement with the West Virginia
PCS Alliance and Virginia PCS Alliance,  which we refer to as the Alliances. The
Alliances are two related  independent PCS providers offering services under the
NTELOS  brand,  and whose network is managed by CFW  Communications.  Under this
agreement, we obtained the right to use their wireless network to provide Sprint
PCS services to our customers in most of these new markets. Within two months of
receiving our second grant from Sprint PCS, we were offering  Sprint PCS service
in 16 of our markets including eleven markets served under this agreement. If we
use the Alliances' network to the fullest extent permitted by our agreement, the
Alliances'  network would provide service to markets with a total  population of
3.3  million  and  coverage  to 1.8  million  residents,  or  52%  of the  total
population.

     In September 1999,  Horizon Telcom sold its interest in the towers it owned
to SBA  Communications,  corp.  ("SBA,"  formerly SBA Towers,  Inc.),  for $15.7
million and  invested  the net  proceeds in us.  Prior to the sale,  we had been
leasing  the towers from  Horizon  Telcom.  We now lease those  towers from SBA.
Concurrently with the tower sale, we entered into a build-to-suit agreement with
SBA for the construction of new towers as part of our network  build-out.  Under
the terms of the agreement,  we receive site  development fees and reduced lease
rates for  specified  towers  constructed  by SBA and  leased to us as an anchor
tenant.

     In September 1999, we became one of the founders of Bright PCS, receiving a
26% equity interest in exchange for an equity contribution of approximately $3.1
million.  Shortly after our investment,  Bright PCS became the exclusive  Sprint
PCS  affiliate  for 13  markets  in  Indiana,  Ohio and  Michigan,  with a total
population of  approximately  2.4 million.  At that time, we also entered into a
management agreement with Bright PCS under which we agreed to manage Bright PCS'
network  build-out and operations.  We launched service in substantially  all of
the Bright PCS markets in October 2000.

     In December  1999,  we completed a two-month  transition  from a co-branded
marketing  strategy to  marketing  and selling all of our  products and services
exclusively  under the  "Sprint  PCS" brand  name,  which gave us full access to
Sprint PCS' major national retailers. Since that transition, we have experienced
an accelerated growth in our customer base.

     In  May  2000,   Sprint  PCS  granted  us  an   additional  17  markets  in
Pennsylvania,  New  York,  Ohio  and  New  Jersey  with a  total  population  of
approximately 2.9 million. In 2000, we substantially completed the purchase from
Sprint PCS of the assets related to our new markets.

     In June 2000,  we acquired the  remaining 74% of Bright PCS that we did not
already own to become a 100% owner. As consideration for the outstanding  Bright
PCS equity, we exchanged 4.7 million shares of our class B common stock equal to
8% of our  outstanding  shares of all  classes of our common  stock prior to the
acquisition, and 31,912 shares of Horizon Telcom common stock equal to 8% of the
outstanding shares of Horizon Telcom, which we acquired in February 2000.

     On September 26, 2000, an investor group led by Apollo Management purchased
$126.5  million  of our  convertible  preferred  stock in a  private  placement.
Concurrently,   holders  of  our  $14.1  million  short  term  convertible  note
(including  accrued  interest  of  $1.1  million)  converted  it into  the  same
convertible preferred stock purchased by the investor group.  Concurrently,  the
Company  received  $149.7  million from the issuance of $295.0 million of senior
discount  notes due 2010 and $50.0 million of term loans from our $225.0 million
secured  credit  facility  (later  increased to a $250.0 million  facility).  In
March,  2002, we received an additional  $105.0  million of term loans under our
secured credit facility.

     In December  2001, we received  $175.0  million from our offering of 13.75%
senior notes.

                                       15
<PAGE>


RESULTS OF OPERATIONS

     Service revenues consist of PCS subscriber  revenues and roaming  revenues.
PCS  subscriber  revenues  consist  primarily of monthly  service fees and other
charges  billed to  customers  for Sprint PCS service in our  territory  under a
variety of service plans.  Roaming revenues consist of Sprint PCS and non-Sprint
PCS roaming.  We receive  Sprint PCS roaming  revenues at a per minute rate from
Sprint PCS or another  Sprint PCS affiliate  when Sprint PCS  subscribers  based
outside of our territory  use our portion of the Sprint PCS network.  Non-Sprint
PCS roaming revenues include  payments from wireless  service  providers,  other
than Sprint PCS, when those providers' subscribers roam on our network.

     We record 100% of PCS subscriber  revenues from our  customers,  Sprint PCS
roaming  revenues  from  Sprint PCS  subscribers  based  outside our markets and
non-Sprint PCS roaming revenues.  Sprint PCS retains 8% of all collected service
revenue as a management fee.  Collected  service revenues include PCS subscriber
revenues and  non-Sprint  PCS roaming  revenues,  but exclude Sprint PCS roaming
revenues and revenues from sales of equipment. We report the amounts retained by
Sprint PCS as general and administrative expense.

     Equipment  revenues  consist of digital  handsets and  accessories  sold to
customers in our territory through our directly-owned channels.

     The following table sets forth a breakdown of our revenues by type:
<TABLE>
<CAPTION>
<S>                                           <C>          <C>       <C>          <C>
                                               For the Three Months Ended March 31,
                                                        2002                  2001
                                               --------------------- ---------------------
                                                Amount          %      Amount          %
                                              ----------   --------  ----------   --------
    Subscriber revenues...................... $   35,015        73%  $   12,063        63%
    Roaming revenues.........................     10,819        22%       6,115        32%
    Equipment revenues.......................      2,376         5%       1,076         5%
                                              ----------   --------  ----------   --------
      Total revenues......................... $   48,210       100%  $   19,254       100%
                                              ==========   ========  ==========   ========
    ARPU including roaming (1)............... $       74             $       80
    ARPU excluding roaming (1)...............         56                     53
</TABLE>
----------

(1)  "ARPU,"  average  revenue per unit, is an industry term that measures total
     PCS service revenues per month from our subscribers  divided by the average
     number of subscribers  for that month.  "ARPU  including  roaming," is ARPU
     with Sprint PCS roaming and travel and  non-Sprint  PCS roaming and travel.
     "ARPU  excluding  roaming,"  excludes Sprint PCS roaming and non-Sprint PCS
     roaming


THREE MONTHS ENDED MARCH 31, 2002, COMPARED TO THREE MONTHS ENDED MARCH 31, 2001

     Subscriber  revenues.  Subscriber revenues for the three months ended March
31, 2002, were  approximately  $35.0 million,  compared to  approximately  $12.1
million for the three months ended March 31, 2001, an increase of  approximately
$22.9 million.  The growth in subscriber revenues is primarily the result of the
growth in our customer base. We managed approximately 222,700 customers at March
31, 2002, compared to approximately  84,700 at March 31, 2001. Our customer base
has grown  because we have launched  additional  markets and increased our sales
force.  ARPU  excluding  roaming  increased  in 2002 to $56  from  $53 in  2001,
primarily  as a result of  increased  minutes  of use by our  customers.  As our
customers exceed their allotted plan minutes,  they incur additional charges for
their usage.

     Roaming  revenues.  Roaming  revenues  increased  from  approximately  $6.1
million  during the three months ended March 31, 2001,  to  approximately  $10.8
million for the three months ended March 31, 2002, an increase of  approximately
$4.7 million.  This increase resulted from launching additional markets over the


                                       16
<PAGE>


past year, including markets covering major interstate highways.  ARPU including
roaming decreased from $80 to $74 for the three months ended March 31, 2001, and
March  31,  2002,  respectively.  This  decrease  primarily  resulted  from  the
continued decease in Sprint PCS roaming rate.

     On April 27, 2001, Sprint PCS and its affiliates  announced an agreement on
a new Sprint PCS roaming rate; the receivable and payable roaming rate decreased
from $0.20 per minute to $0.15 per minute  effective June 1, 2001, and decreased
further to $0.12 per minute  effective  October 1, 2001.  The Sprint PCS roaming
rate changed to $0.10 per minute on January 1, 2002.  After 2002,  the rate will
be changed to "a fair and reasonable  return" which has not yet been determined.
This decrease in the rate will reduce our revenue and expense per minute, but we
anticipate  this rate  reduction  will be offset  by volume  increases  from the
continued  build-out of our network and subscriber growth,  resulting in greater
overall roaming revenue and expense in the future.

     Equipment revenues. Equipment revenues for the three months ended March 31,
2002, were  approximately  $2.4 million,  compared to approximately $1.1 million
for the  three  months  ended  March  31,  2001,  representing  an  increase  of
approximately $1.3 million.  The increase in equipment revenues is the result of
an  increase in the number of handsets  sold,  somewhat  offset by a lower sales
price per unit.

     Cost of service.  Cost of service  includes costs associated with operating
our network,  including site rent,  utilities,  engineering  personnel and other
expenses  related to operations.  Cost of service also includes  interconnection
expenses,  customer care, Sprint charges, Sprint PCS roaming fees and non-Sprint
PCS roaming  fees.  We pay  roaming  fees to Sprint PCS when our  customers  use
Sprint PCS' network outside of our territory. We pay non-Sprint PCS roaming fees
to other wireless service providers when our customers use their networks.

     Also  included  in cost of service  are costs  incurred  under our  network
services agreement with the Alliances. In the third quarter of 2001, Horizon PCS
negotiated  an  amendment  to its  agreement  with the  Alliances  and a related
amendment to its Sprint PCS agreements.  Under the Alliances amendment,  Horizon
PCS is  obligated  to pay a minimum  monthly  fee for a stated  minimum  period.
Horizon PCS expects to incur lower  overall fees under this new  arrangement  at
expected usage levels as compared to the previous  agreement that was based on a
per minute fee. The  Alliances are also  obligated to upgrade their  networks to
provide 3G technology.  In connection  with this  amendment,  the Alliances have
agreed with  Sprint PCS to modify  their  networks to cause  Sprint PCS to be in
compliance with the FCC's  construction  requirements for PCS networks.  Horizon
PCS would be  responsible  for  completion of the network  modifications  if the
Alliances fail to comply.

     Cost  of  service  for  the  three  months   ended  March  31,  2002,   was
approximately  $35.8 million,  compared to  approximately  $18.0 million for the
three months ended March 31, 2001, an increase of  approximately  $17.8 million.
This increase  reflects an increase in roaming expense and long distance charges
of  approximately  $5.5  million and the  increase in costs  incurred  under our
network  services  agreement with the Alliances of  approximately  $2.9 million,
both as a result of our  subscriber  growth during 2001 and the first quarter of
2002.  Additionally,  at March 31, 2001, our network covered  approximately  5.2
million people. At March 31, 2002, our network covered approximately 7.2 million
people.  As a result,  cost of service  in 2002 was higher  than 2001 due to the
increase in network operations, including tower lease expense, circuit costs and
payroll  expense,  of  approximately  $4.9 million.  Growth in our customer base
resulted  in  increased  customer  care,  activations,  and  billing  expense of
approximately $3.6 million and other variable expenses,  including switching and
national platform expenses, of approximately $900,000.

     Cost of  equipment.  Cost of  equipment  includes  the cost of handsets and
accessories sold by our stores and direct sales force to our customers.  Cost of
equipment  for the three  months ended March 31, 2002,  was  approximately  $4.9
million, compared to approximately $2.2 million for the three months ended March
31, 2001, an increase of approximately $2.7 million. The increase in the cost of
equipment  is the  result  of the  growth  in our  wireless  customers  (we sold
approximately 15,000 handsets through our direct sales channels during the three
months ended March 31,  2002,  compared to  approximately  7,000 during the same
period in 2001),  partially  offset by the decreasing unit cost of the handsets.


                                       17
<PAGE>


For  competitive and marketing  reasons,  we have sold handsets to our customers
below our cost and expect to continue to sell handsets at a price below our cost
for the foreseeable future.

     Selling and marketing  expenses.  Selling and marketing expenses consist of
costs  associated  with  operating  our  retail  stores,   including  marketing,
advertising,  payroll and sales commissions.  Selling and marketing expense also
includes  commissions  paid to  national  and  local  third  party  distribution
channels  and  subsidies on handsets  sold by third  parties for which we do not
record  revenue.  Selling and  marketing  expenses rose to  approximately  $14.7
million for the three  months ended March 31,  2002,  compared to  approximately
$7.1  million  for the  three  months  ended  March 31,  2002,  an  increase  of
approximately $7.6 million. This reflects the increase in the costs of operating
39 retail stores in 2002 compared to 17 at the end of the first quarter of 2001.
The  costs  include   marketing  and  advertising  in  our  sales  territory  of
approximately $4.7 million,  the increase in subsidies on handsets sold by third
parties of  approximately  $1.7 million and the increase in commissions  paid to
third parties of  approximately  $1.2 million.  We expect  selling and marketing
expense  to  increase  in  the  aggregate  as we  expand  our  coverage,  launch
additional stores and add customers.

     General  and  administrative  expenses.  General and  administrative  costs
include  the Sprint PCS  management  fee  (which is 8% of  "collected  revenues"
defined above), a provision for doubtful accounts and costs related to corporate
support functions  including costs associated with functions performed for us by
Horizon  Services  under our  services  agreement.  These  include  finance  and
accounting services, computer access and administration, executive, supervisory,
consulting,   customer  relations,  human  resources  and  other  administrative
services.  Horizon Services' costs for these functions are charged to us using a
standard FCC cost allocation methodology. Under this methodology, all costs that
can be specifically  identified to us are directly  charged to us, and all costs
that are  specifically  identified to other  subsidiaries  of Horizon Telcom are
charged to them.  Costs incurred by Horizon Services that cannot be specifically
identified  to a  company  for  which  Horizon  Services  provides  service  are
apportioned among the Horizon Telcom subsidiaries based on appropriate measures.
Because of the economies of scale inherent in a centralized  service company, we
believe we are able to receive  these  services  less  expensively  through this
arrangement than if we provided them ourselves.

     General and  administrative  expenses  for the three months ended March 31,
2002, were  approximately $9.2 million compared to approximately $4.6 million in
2001,  an increase of  approximately  $4.6  million.  The  increase  reflects an
increase in the provision for doubtful  accounts of approximately  $2.8 million,
an increase in the Sprint PCS management fee of approximately  $1.7 million as a
result of higher  subscriber  revenues  in 2002 and other  general  expenses  of
approximately $100,000.

     Non-cash compensation expense. We recorded  approximately  $177,000 for the
three months ended March 31, 2002 and 2001 for certain stock options  granted in
November 1999.  Stock-based  compensation expense will continue to be recognized
through the  conclusion  of the vesting  period for these  options in 2005.  The
annual non-cash  compensation  expense expected to be recognized for these stock
options is approximately  $681,000 in 2002,  $622,000 in 2003, $193,000 in 2004,
and $71,000 in 2005.

     Depreciation  and  amortization  expense.   Depreciation  and  amortization
expenses  increased by  approximately  $4.5 million to a total of  approximately
$7.9 million during the three months ended March 31, 2002. The increase reflects
the  continuing  construction  of our network as we funded  approximately  $23.4
million of capital expenditures during the three months ended March 31, 2002.

     Since  our  acquisition  of  Bright  PCS was  accounted  for as a  purchase
transaction, we recorded goodwill and intangible assets. Amortization expense of
the intangible  asset was  approximately  $427,000 during the three months ended
March 31, 2002 and 2001. Related goodwill amortization was approximately $97,000
during the three months ended March 31, 2001. Goodwill amortization ceased as of
December  31, 2001,  with the  adoption of SFAS No. 142. See "Recent  Accounting
Pronouncements" below.

                                       18
<PAGE>


     Amortization  expense also includes  amortization  of an  intangible  asset
recorded in September  2000  related to the new markets  granted to us by Sprint
PCS in September 2000. We agreed to grant warrants to Sprint PCS in exchange for
the right to provide service in additional markets.  The warrants will be issued
to Sprint PCS at the  earlier of an initial  public  offering  of the  Company's
common stock or July 31, 2003. The intangible  asset is being amortized over the
remaining   term  of  the  Sprint  PCS   management   agreement,   resulting  in
approximately   $752,000  of   amortization   expense  per  year.   Accordingly,
amortization expense related to this intangible asset was approximately $188,000
for the three months ended March 31, 2002 and 2001.

     Loss on sale of property and equipment. During the three months ended March
31, 2002, we incurred a loss of  approximately  $286,000  related to the sale of
corporate-owned  vehicles.  The sale resulted in proceeds of approximately  $1.3
million. The vehicles were subsequently leased back from the purchaser.

     Interest  income and other,  net.  Interest income and other income for the
three  months  ended March 31,  2002,  was  approximately  $744,000  compared to
approximately  $2.9 million in 2001 and consisted  primarily of interest income.
This decrease was due primarily to a lower average  balance of cash  investments
during the first  quarter of 2002 as compared to the same period in 2001 and due
to a lower short-term interest rate environment in 2002.

     Interest  expense,  net.  Interest expense for the three months ended March
31, 2002,  was  approximately  $12.7  million,  compared to  approximately  $6.2
million in 2001. The increase in interest expense was a result of our additional
indebtedness. Interest on the outstanding balance of our secured credit facility
accrues at LIBOR plus a specified margin. On June 29, 2001, we agreed to several
changes in the secured  credit  facility  including a 25 basis point increase in
the annual interest rate. At March 31, 2001, $50.0 million was outstanding under
the secured credit facility.  We borrowed an additional  $105.0 million on March
22, 2002, which was required under the terms of the secured credit facility.  At
March 31,  2002,  the interest  rate on the $105.0  million term loan A borrowed
under our secured  credit  facility was 5.75%,  while the  interest  rate on the
$50.0 term loan B was 6.30%. Interest expense on the secured credit facility was
$1.2 million and $1.3  million  during the three months ended March 31, 2002 and
2001, respectively.

     We accrue  interest  at a rate of 14.00%  annually  on our  discount  notes
issued in September 2000 and will pay interest  semi-annually  in cash beginning
in  October  2005.  Unaccreted  interest  expense  on  the  discount  notes  was
approximately $129.6 million at March 31, 2002. Interest expense on the discount
notes was  approximately  $6.4 million and $5.5 million  during the three months
ended March 31, 2002 and 2001, respectively.

     On June 15, 2002, we will begin making semi-annual interest payments on our
senior  notes  issued in  December  2001 at an annual  rate of 13.75%.  Interest
expense  accrued on the senior notes was  approximately  $6.0 million during the
three months ended March 31, 2002. Under the terms of the senior notes,  cash to
cover the first  four  semi-annual  interest  payments  was  placed in an escrow
account.

     Interest expense also includes  approximately  $600,000 and $200,000 during
the three months ended March 31, 2002 and 2001,  respectively,  of  amortization
from the deferred  financing  fees related to our secured credit  facility,  our
discount  notes and our senior  notes.  Also  contributing  to the  increase  in
interest expense during the three months ended 2002 was  approximately  $600,000
in commitment fees we paid on the unused portion of our secured credit facility.

     Capitalized interest during the three months ended March 31, 2002 and 2001,
was  approximately  $2.1 million and $1.5 million,  respectively.  We expect our
interest expense to increase in the future as we borrow under our secured credit
facility to fund our network build-out and operating losses.

     During 2001,  we entered into interest  rate swap  agreements,  effectively
fixing the  interest  rate on $50.0  million  borrowed  under our  variable-rate
secured credit facility.  We recognized a loss of  approximately  $34,000 during
the first  quarter  of 2002,  in the  statement  of  operations,  related to the
ineffectiveness of a portion of the hedge.

                                       19
<PAGE>


     Income  taxes.   Until   September  26,  2000,  we  were  included  in  the
consolidated  Federal  income tax  return of Horizon  Telcom.  We  provided  for
Federal  income  taxes  on a pro  rata  basis,  consistent  with a  consolidated
tax-sharing  agreement.  As a result  of the sale of the  convertible  preferred
stock on September 26, 2000, we are not able to participate  in the  tax-sharing
agreement.  Additionally,  we are not able to recognize any net  operating  loss
benefits  until we  generate  taxable  income.  We did not record any income tax
benefit  for the three  months  ended  March 31,  2002 or 2001,  because  of the
uncertainty of generating  future taxable income to be able to recognize current
net operating loss carryforwards.

     Net loss.  Our net loss for the three  months  ended  March 31,  2002,  was
approximately  $36.8  million  compared to  approximately  $19.5 million for the
three  months  ended  March 31,  2001.  The  increase in our loss  reflects  the
continued  expenses  related to launching  our markets and building our customer
base.  We  expect  to  incur  significant   operating  losses  and  to  generate
significant  negative cash flow from operating  activities  while we continue to
construct our network and increase our customer base.

     Preferred  stock  dividend.  Our  convertible  preferred stock pays a stock
dividend at the rate of 7.5% per annum, payable semi-annually  commencing May 1,
2001. The dividends are paid with  additional  shares of  convertible  preferred
stock.  Through May 1, 2002,  we have issued an additional  3,245,134  shares of
convertible preferred stock in payments of all dividends through April 30, 2002,
including 1,060,201 shares on May 1, 2002.

     Other comprehensive income (loss). In the first quarter of 2001, we entered
into a two-year interest rate swap, effectively fixing $25.0 million of our term
loan borrowed under the secured credit  facility at a rate of 9.4%. In the third
quarter  of  2001,  we  entered  into  another  two-year   interest  rate  swap,
effectively  fixing an additional  $25.0 million of our term loan borrowed under
the secured credit facility at 7.65%. We do not expect the effect of these swaps
to have a material impact to interest  expense for the remainder of their lives.
We recovered  approximately  $390,000 of previously  unrealized  losses in other
comprehensive   income  during  the  first   quarter  of  2002  and   recognized
approximately  $34,000  of  loss  in  the  statement  of  operations  due to the
ineffectiveness of the hedge.



                                       20
<PAGE>


LIQUIDITY AND CAPITAL RESOURCES

     Through  September  26, 2000,  we financed our  operations  through  equity
contributions  from Horizon  Telcom and through debt  financing  provided by the
Rural Telephone Finance  Cooperative  (RTFC). On September 26, 2000, an investor
group led by Apollo  Management  purchased  $126.5  million  of our  convertible
preferred stock in a private placement.  Concurrent with the closing, holders of
our $14.1 million  short-term  convertible  note (including  accrued interest of
$1.1 million)  converted it into the same convertible  preferred stock purchased
by the investor  group.  On September 26, 2000, the Company also received $149.7
million  from the  issuance of $295.0  million of discount  notes due 2010.  The
discount  notes  accrete  in  value  until  October  1,  2005,  at a rate of 14%
compounded semi-annually.  Also on September 26, 2000, we received an additional
$50.0 million as part of a $225.0 million  secured credit  facility led by First
Union National Bank. The amount of the secured credit  facility was increased to
$250.0  million in November  2000.  On June 29,  2001,  the Company  amended its
secured credit  agreement  with the bank group.  This  modification  amended and
restated certain financial  covenants,  including EBITDA and revenue thresholds.
The  amendment  also  increased the margin on the base interest rate by 25 basis
points to LIBOR plus 3.75% to 4.25%. On March 22, 2002, the Company  received an
additional $105.0 million as part of the secured credit facility. On December 7,
2001, the Company  received $175.0 million from the issuance of unsecured senior
notes due June 15, 2011.  Interest is paid semi-annually on June 15 and December
15 at 13.75%  commencing  June 15,  2002.  Approximately  $48.7  million  of the
offering  proceeds  were  placed in an  escrow  account  to fund the first  four
semi-annual interest payments.

     At March 31, 2002, we had cash and cash equivalents of approximately $195.9
million and working capital of  approximately  $177.7  million.  At December 31,
2001,  we had cash and cash  equivalents  of  approximately  $123.8  million and
working capital of approximately  $117.0 million.  The increase in cash and cash
equivalents  of  approximately  $72.1 million is primarily  attributable  to the
$105.0 million draw on the secured credit facility, offset by the funding of our
loss from  continuing  operations  of  approximately  $36.8  million  (this loss
includes  certain  non-cash  charges)  and funding our capital  expenditures  of
approximately $23.4 million during the first quarter of 2002.

     Net cash used in operating  activities for the three months ended March 31,
2002, was approximately $10.7 million.  This reflects the continuing use of cash
for our  operations  to build our customer  base,  including  but not limited to
providing  service in our markets and the costs of acquiring new customers.  For
the three months ended March 31, 2002 our cost per gross additional customer was
approximately  $342. The net loss of  approximately  $36.8 million was partially
offset by increases to depreciation, increases in accrued liabilities, including
the payable to Sprint, offset by increases to accounts receivable.

     Net cash used in investing  activities for the three months ended March 31,
2002, was approximately $22.2 million.  Our capital expenditures for that period
were  approximately  $23.4  million,  reflecting  the  continuing  build-out and
upgrade of our network.  At March 31, 2002, we operated  approximately  700 cell
sites  in our  network  (an  additional  494 cell  sites  were  operated  by the
Alliances in our  territories).  This represents an addition of approximately 96
sites during the three months ended March 31, 2002, and  approximately 380 sites
since March 31, 2001. In addition to the sites,  we have increased the number of
switching  stations in our  territory  and have  increased  our number of retail
stores  from 38 at the  end of  2001 to 39 at  March  31,  2002.  We will  incur
additional  capital  expenditures  as we complete the  build-out of our network,
including the launch of additional  retail stores,  completing  additional  cell
sites and expanding  capacity at our switches as needed.  We are also  upgrading
our  network  to  provide  3G (third  generation)  wireless  service  which will
increase voice capacity and allow for higher-speed data transmission.

     Net cash provided by financing  activities for the three months ended March
31, 2002, was $105.0 million  consisting of the March 2002 draw on the term loan
A required under our secured credit facility.

     At March 31, 2002,  we had a $95.0 million line of credit  remaining  under
our secured credit  facility.  In connection with the waiver  agreement  entered


                                       21
<PAGE>


into with our lending group  (discussed in Note 9 and in greater  detail below),
we agreed not to borrow on this line of credit  before June 15, 2002, as long as
our cash balance,  excluding  restricted  cash and  compensating  balances,  was
greater than $10.0  million.  We anticipate our existing cash will be sufficient
to meet capital  expenditure  and working  capital  requirements  until June 15,
2002, and we believe the available  borrowings under our secured credit facility
will be adequate to fund our network build-out, anticipated operating losses and
working capital  requirements until we achieve positive EBITDA,  which we expect
to occur in the third quarter of 2003.

     For the year ended  December 31, 2002, we anticipate our funding needs will
be between $140.0 and $150.0 million,  of which  approximately  $60.0 million to
$70.0 million will be used for capital  expenditures with the remainder utilized
to fund working  capital and  operating  losses.  The actual  funds  required to
build-out and upgrade our network and to fund operating losses,  working capital
needs and other  capital  needs may vary  materially  from these  estimates  and
additional  funds may be required because of unforeseen  delays,  cost overruns,
unanticipated  expenses,  regulatory  changes,  engineering  design  changes and
required technological upgrades and other technological risks.

     Other  future  cash  expenditures  that may require  additional  borrowings
include:

o    expanding the coverage within our existing  operating  markets or improving
     call quality with fill-in coverage;

o    opening additional retail stores, beyond our current plan of 50 stores;

o    mergers or acquisitions of other Sprint PCS affiliates or other  compatible
     PCS carriers

o    the grant to us by Sprint PCS of  additional  markets  under our Sprint PCS
     agreements; and/or

o    expanding our network, if economically justifiable, by exercising our right
     to build our own  network in our  markets  which are covered by our network
     services  agreement  with the  Alliances  under the  terms of that  amended
     agreement.

     If we are  unable to obtain any  necessary  additional  funding  and we are
unable to complete our network  build-out,  this may result in a termination  of
our Sprint PCS agreement; we will no longer be able to offer Sprint PCS products
and services.  In this event,  Sprint PCS may purchase our  operating  assets or
capital stock under terms defined in our  agreements  with Sprint PCS. Also, any
delays in our build-out may result in penalties  under our Sprint PCS agreement,
as amended.

     Horizon PCS' secured credit facility includes financial covenants that must
be met each  quarter.  We did not meet the  covenant  for  EBITDA  for the first
quarter of 2002. As a result of higher than expected  gross and net additions to
Horizon PCS subscribers for the quarter,  we incurred additional expenses to add
those customers.  Although we ultimately  benefit from the revenues generated by
new  subscribers,  we incur one-time  expenses  associated with new subscribers,
including  commissions,  handset  subsidies,  set up costs for the  network  and
marketing  expenses.  As a result,  these new subscriber costs negatively affect
EBITDA in the short-term  during the period of the addition of new  subscribers,
which led to  non-compliance  with the EBITDA  covenant for the first quarter of
2002.

     On May 9, 2002, we entered into a waiver  agreement  with our lending group
waiving this  non-compliance  with the covenant  through June 15, 2002.  We also
agreed  that until June 15,  2002,  we would not  borrow  funds  under our $95.0
million facility so long as our cash and cash equivalents  (excluding restricted
cash)  exceeds $10.0  million and that we would  maintain the $105.0  million in
loan proceeds recently received from the lending group in a separate account. We
are currently in  negotiations  with the bank group to obtain  amendments to the
covenants. We anticipate finalizing these amendments by June 15, 2002.

                                       22
<PAGE>


     The failure to comply with the covenant  was an event of default  under our
secured credit  facility,  and will give the lender the right to pursue remedies
if we are unable to agree on the  amendment  by June 15,  2002.  These  remedies
could  include  acceleration  of amounts due under the  facility.  If the lender
elected to  accelerate  the  indebtedness  under the  facility,  this would also
represent a default under the indentures of our senior notes and discount notes.
One option available to us would be to prepay the indebtedness under the secured
credit facility, together with prepayment fees. If we prepaid the facility prior
to  acceleration,  we would avoid  default under the  indentures  for our senior
notes and discount notes. In the event of such a prepayment,  we believe that we
could obtain replacement  financing to the extent necessary to fund our business
plan.  There can be no  assurance,  however,  that we could  obtain  adequate or
timely replacement financing on acceptable terms or at all.

SEASONALITY

     Our business is subject to  seasonality  because the  wireless  industry is
heavily  dependent on calendar fourth quarter results.  Among other things,  the
industry relies on significantly  higher customer additions and handset sales in
the calendar fourth quarter as compared to the other three calendar quarters.  A
number of factors contribute to this trend, including:

o    the increasing use of retail distribution, which is more dependent upon the
     year-end holiday shopping season;

o    the timing of new product and service announcements and introductions;

o    competitive pricing pressures; and

o    aggressive marketing and promotions.

INFLATION

     We believe  that  inflation  has not had a material  adverse  effect on our
results of operation.

RECENT ACCOUNTING PRONOUNCEMENTS

     In July 2001, the Financial Accounting Standards Board ("FASB") issued SFAS
No.  141,  "Business  Combinations"  and  SFAS  No.  142,  "Goodwill  and  Other
Intangible  Assets." SFAS No. 141 addresses  financial  accounting and reporting
for all  business  combinations  and  requires  that all  business  combinations
entered into subsequent to June 2001 be recorded under the purchase method. This
statement  also  addresses  financial  accounting and reporting for goodwill and
other intangible assets acquired in a business combination at acquisition.  SFAS
No. 142 addresses  financial  accounting  and reporting  for  intangible  assets
acquired  individually  or with a group of other  assets  at  acquisition.  This
statement  also  addresses  financial  accounting and reporting for goodwill and
other intangible assets subsequent to their acquisition.

     These  statements were adopted by the Company on January 1, 2002.  Goodwill
amortization ceased as of December 31, 2001, and the Company will be required to
complete an impairment test of the remaining  goodwill balance annually (or more
frequently if impairment  indicators  arise). The Company has not yet determined
the  financial  impact the  adoption  of these  pronouncements  will have on its
financial  position or results of operations.  As of March 31, 2002, the Company
has  goodwill of  approximately  $7,191,000,  net of  accumulated  amortization,
related to the  acquisition  of Bright PCS. The Company will  complete the first
step of the impairment test by June 30, 2002,  and, if necessary,  will complete
the second step by December 31, 2002.


                                       23
<PAGE>


     In June  2001,  the  FASB  issued  SFAS  No.  143,  "Accounting  for  Asset
Retirement  Obligations."  This  statement  addresses  financial  accounting and
reporting for obligations associated with the retirements of tangible long-lived
assets  and  the  associated  asset  retirement   costs.  It  applies  to  legal
obligations associated with the retirement of long-lived assets that result from
the  acquisition,  construction,  development and (or) the normal operation of a
long-lived  asset.  The Company will adopt this statement  effective  January 1,
2003.  The adoption is not expected to have a material  effect on the  Company's
financial position, results of operations or cash flows.

     In  August  2001,  the  FASB  issued  SFAS  No.  144,  "Accounting  for the
Impairment or Disposal of Long-Lived  Assets." SFAS No. 144 addresses  financial
accounting and reporting for the impairment of long-lived  assets. The statement
supersedes SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and
for  Long-Lived  Assets to Be Disposed  Of," and the  accounting  and  reporting
provisions of APB Opinion No. 30. SFAS No. 144 removes  goodwill from its scope,
as goodwill is addressed in the impairment  test described  above under SFAS No.
142. The Company  adopted SFAS No. 144 on January 1, 2002.  The adoption did not
have  a  material  effect  on  the  Company's  financial  position,  results  of
operations or cash flows.


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

     We do not engage in commodity  futures trading  activities and do not enter
into  derivative  financial  instruments  for trading  purposes.  We also do not
engage in transactions in foreign  currencies that would expose us to additional
market risk.

     In the normal course of business,  our  operations  are exposed to interest
rate risk on our  variable-rate  secured credit  facility.  Our primary interest
rate risk exposure  relates to (i) the interest rate on our financing,  (ii) our
ability to  refinance  our  fixed-rate  discount and senior notes at maturity at
market rates,  and (iii) the impact of interest rate movements on our ability to
meet interest expense  requirements and meet financial  covenants under our debt
instruments.

     We manage the interest rate risk on our outstanding  long-term debt through
the use of fixed and  variable-rate  debt and interest rate swaps.  In the first
quarter of 2001,  we entered  into a two-year  interest  rate swap,  effectively
fixing $25.0 million of the term loan borrowed under the secured credit facility
at a rate of 9.4%.  In the  third  quarter  of 2001,  we  entered  into  another
two-year  interest rate swap,  effectively  fixing  another $25.0 million of the
term loan borrowed under the secured credit facility at 7.65%.

     Since  our swap  interest  rates  are  currently  greater  than the  market
interest rates on our underlying  debt,  our results from  operations  currently
reflect a higher interest expense than had we not hedged our position.  While we
cannot  predict our ability to refinance  existing  debt or the impact  interest
rate  movements  will have on our  existing  debt,  we continue to evaluate  our
interest  rate risk on an ongoing  basis.  We are  exposed to market risk on our
long-term debt related to the current market value of interest rates compared to
our fixed and variable-rate debt. As of March 31, 2002, approximately 83% of our
long-term  debt is  fixed-rate or is  variable-rate  that has been swapped under
fixed-rate hedges, thus reducing our exposure to interest rate risk. A 100-basis
point   increased  in  interest  rates  would  increase  our  interest   expense
approximately  $1.1 million and it would also have an impact on the market value
of our debt.

     If we do  not  renew  our  swaps,  or,  if we do  not  hedge  variable-rate
incremental borrowings under our secured credit facility, of which we have $95.0
million  available at March 31, 2002,  we will  increase our interest  rate risk
which could have a material impact on our future earnings.

                                       24
<PAGE>


<TABLE>
<CAPTION>
<S>                                <C>          <C>           <C>           <C>           <C>           <C>
(Dollars in millions)                                        Years Ending December 31,
                                   -------------------------------------------------------------------
                                       2002         2003          2004          2005          2006      Thereafter
                                   -----------  ------------  ------------  ------------  ------------  ----------
Secured credit facility,
  due 2008.....................    $    155.0   $    155.0    $    155.0    $    155.0    $    155.0    $    155.0
     Variable interest rate (1)           5.92%        5.92%         5.92%         5.92%         5.92%         5.92%
     Principal payments........    $      -     $      -      $      0.4    $      0.5    $      0.5    $    153.6

Discount notes, due 2010 (2)...    $    186.3   $    217.5    $    253.1    $    283.7    $    286.1    $    295.0
     Fixed interest rate.......          14.00%       14.00%        14.00%        14.00%        14.00%        14.00%
     Principal payments........    $      -     $      -      $      -      $      -      $      -      $    295.0

Senior notes, due 2011.........    $    175.0   $    175.0    $    175.0    $    175.0    $    175.0    $    175.0
     Fixed interest rate.......          13.75%       13.75%        13.75%        13.75%        13.75%        13.75%
     Principal payments........    $      -     $      -      $      -      $      -      $     -       $    175.0
</TABLE>

-----------------

(1)  Interest rate on the secured credit  facility  equals the London  Interbank
     Offered  Rate  ("LIBOR")  plus a margin  that  varies from 375 to 425 basis
     points.  At March 31, 2002,  $50.0  million was  effectively  fixed at 8.5%
     through an interest rate swap discussed above. The interest rate is assumed
     to equal 5.92% for all periods ($50.0  million  tranche at 6.25% and $105.0
     million tranche at 5.75%).
(2)  Face value of the discount  notes is $295.0  million.  End of year balances
     presented  herein  are net of the  discount  and  assume  accretion  of the
     discount as interest expense at an annual rate of 14.0%




                                       25
<PAGE>


                           PART II--OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

     None.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

     None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

     Horizon PCS' secured credit facility includes financial covenants that must
be met each  quarter.  We did not meet the  covenant  for  EBITDA  for the first
quarter of 2002. As a result of higher than expected  gross and net additions to
Horizon PCS subscribers for the quarter,  we incurred additional expenses to add
those customers.  Although we ultimately  benefit from the revenues generated by
new  subscribers,  we incur one-time  expenses  associated with new subscribers,
including  commissions,  handset  subsidies,  set up costs for the  network  and
marketing  expenses.  As a result,  these new subscriber costs negatively affect
EBITDA in the short-term  during the period of the addition of new  subscribers,
which led to  non-compliance  with the EBITDA  covenant for the first quarter of
2002.

     On May 9, 2002, we entered into a waiver  agreement  with our lending group
waiving this  non-compliance  with the covenant  through June 15, 2002.  We also
agreed  that until June 15,  2002,  we would not  borrow  funds  under our $95.0
million facility so long as our cash and cash equivalents  (excluding restricted
cash)  exceeds $10.0  million and that we would  maintain the $105.0  million in
loan proceeds recently received from the lending group in a separate account. We
are currently in  negotiations  with the bank group to obtain  amendments to the
covenants. We anticipate finalizing these amendments by June 15, 2002.

     The failure to comply with the covenant  was an event of default  under our
secured credit  facility,  and will give the lender the right to pursue remedies
if we are unable to agree on the  amendment  by June 15,  2002.  These  remedies
could  include  acceleration  of amounts due under the  facility.  If the lender
elected to  accelerate  the  indebtedness  under the  facility,  this would also
represent a default under the indentures of our senior notes and discount notes.
One option available to us would be to prepay the indebtedness under the secured
credit facility, together with prepayment fees. If we prepaid the facility prior
to  acceleration,  we would avoid  default under the  indentures  for our senior
notes and discount notes. In the event of such a prepayment,  we believe that we
could obtain replacement  financing to the extent necessary to fund our business
plan.  There can be no  assurance,  however,  that we could  obtain  adequate or
timely replacement financing on acceptable terms or at all.


ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS

     None.

ITEM 5. OTHER INFORMATION

                                  RISK FACTORS

WE HAVE NOT HAD ANY  PROFITABLE  YEARS IN THE PAST  FIVE  YEARS,  AND WE MAY NOT
ACHIEVE OR SUSTAIN OPERATING  PROFITABILITY OR POSITIVE CASH FLOW FROM OPERATING
ACTIVITIES.

     We expect to incur significant operating losses and to generate significant
negative  cash flow from  operating  activities  until 2004 while we continue to
construct our network and grow our customer  base.  Our operating  profitability
will depend upon many  factors,  including  our ability to market our  services,


                                       26
<PAGE>

achieve our projected market  penetration and manage customer turnover rates. If
we do not achieve and maintain  operating  profitability  and positive cash flow
from operating activities on a timely basis, we may not be able to meet our debt
service requirements.

IF WE FAIL TO COMPLETE THE  BUILD-OUT OF OUR NETWORK,  SPRINT PCS MAY  TERMINATE
THE SPRINT  PCS  AGREEMENTS  AND WE WOULD NO LONGER BE ABLE TO OFFER  SPRINT PCS
PRODUCTS AND SERVICES FROM WHICH WE GENERATE SUBSTANTIALLY ALL OUR REVENUES.

     Our long-term affiliation  agreements with Sprint PCS, which we refer to as
the Sprint PCS  agreements,  require us to build and  operate the portion of the
Sprint PCS  network  located in our  territory  in  accordance  with Sprint PCS'
technical specifications and coverage requirements.  The agreements also require
us to provide  minimum  network  coverage to the  population  within each of the
markets which make up our territory by specified dates.

     Under our original Sprint PCS agreements,  we were required to complete the
build-out in several of our markets in Pennsylvania and New York by December 31,
2000.  Sprint PCS and HPC agreed to an amendment of the build-out  requirements,
which extended the dates by which we were to launch coverage in several markets.
The amended Sprint PCS agreement  provides for monetary  penalties to be paid by
us if coverage is not launched by these extended  contract dates. The amounts of
the penalties range from $16,500 to $602,000 for each shortfall depending on the
market  and  length  of delay  (up to 180 days) in  launch,  and in some  cases,
whether the shortfall  relates to an initial  launch in the market or completion
of the  remaining  build-out.  The  penalties  must be paid in cash,  or if both
Horizon PCS and Sprint PCS agree, in shares of Horizon PCS stock.

     Under the amended Sprint PCS agreement,  portions of the New York, Sunbury,
Williamsport,  Oil City, Dubois,  Erie,  Meadville,  Sharon,  Olean,  Jamestown,
Scranton,  State College,  Stroudsburg,  Allentown and  Pottsville  markets were
required to be  completed  and  launched by October 31,  2001.  Although we have
launched service in portions of each of these markets, we have not completed all
of the build-out  requirements.  We notified Sprint PCS in November 2001 that it
is our  position  that the  reasons  for the delay  constitute  events of "force
majeure" as described in the Sprint PCS  agreements and that,  consequently,  no
monetary  penalties or other remedies  would be  applicable.  The delay has been
primarily caused due to delays in obtaining the required  backhaul services from
local  exchange  carriers  and  zoning  and other  approvals  from  governmental
authorities.  On January 30, 2002,  Sprint PCS notified us that,  as a result of
these force majeure  events,  it does not consider our  build-out  delay to be a
breach  of  the  Sprint  PCS  agreement.  We  have  agreed  to  continue  to use
commercially reasonable efforts to reach build-out completion by either June 30,
2002 (for most of the  affected  markets),  or April 30,  2002 (for two of these
markets). By April 30, 2002 we materially completed these two markets.  However,
we continue to experience events of force majeure in most of these markets.

     We will  require  additional  expenditures  of  significant  funds  for the
continued development,  construction,  testing,  deployment and operation of our
network.  These  activities  are  expected to place  significant  demands on our
managerial, operational and financial resources. A failure to meet our build-out
requirements  for  any  of  our  markets,  or  to  meet  Sprint  PCS'  technical
requirements,  would constitute a breach of the Sprint PCS agreements that could
lead to their  termination  if not cured within the applicable  cure period.  If
Sprint  PCS  terminates  these  agreements,  we will no  longer be able to offer
Sprint PCS products and services.

OUR SUBSTANTIAL  INDEBTEDNESS  COULD ADVERSELY  AFFECT OUR FINANCIAL  HEALTH AND
PREVENT US FROM FULFILLING OUR LONG-TERM DEBT OBLIGATIONS.

     As of March 31,  2002,  our total  debt  outstanding  was  $625.0  million,
comprised of $155.0 million borrowed under our secured credit  facility,  $175.0
million due under our senior  notes issued in December  2001 and $295.0  million
represented  by our discount  notes (which are reported on our balance  sheet at
March 31, 2002, net of a discount of approximately $129.6 million).

     Our  substantial  debt  will  have  a  number  of  important  consequences,
including the following:

                                       27
<PAGE>

o    we may not have sufficient  funds to pay interest on, and principal of, our
     debt;

o    we have to dedicate a  substantial  portion of any positive  cash flow from
     operations to the payment of interest on, and principal of, our debt, which
     will reduce funds available for other purposes;

o    we  may  not  be  able  to  obtain   additional   financing  for  currently
     unanticipated capital requirements,  capital expenditures,  working capital
     requirements and other corporate purposes;

o    some  borrowings  likely will be at variable rates of interest,  which will
     result in higher  interest  expense  in the  event of  increases  in market
     interest rates;

o    due to the liens on  substantially  all of our  assets  and the  pledges of
     equity  ownership  of our  subsidiaries  that  secure  our  secured  credit
     facility, our lenders may control our assets upon a default;

o    our debt  increases  our  vulnerability  to general  adverse  economic  and
     industry conditions;

o    our debt limits our flexibility in planning for, or reacting to, changes in
     our business and the industry in which we operate; and

o    our  debt  places  us  at  a  competitive   disadvantage  compared  to  our
     competitors that have less debt.

TO SERVICE OUR INDEBTEDNESS,  WE WILL REQUIRE A SIGNIFICANT  AMOUNT OF CASH. OUR
ABILITY TO GENERATE CASH DEPENDS ON MANY FACTORS BEYOND OUR CONTROL.

     Our ability to make payments on and to refinance our  indebtedness,  and to
fund our network  build-out,  anticipated  operating  losses and working capital
requirements will depend on our ability to generate cash in the future. This, to
a certain  extent,  is  subject  to general  economic,  financial,  competitive,
legislative, regulatory and other factors that are beyond our control.

     We cannot be certain that our business will generate  sufficient  cash flow
from  operations  or that future  borrowings  will be  available to us under our
secured  credit  facility  in an  amount  sufficient  to  enable  us to pay  our
indebtedness or to fund our other liquidity  needs. We may need to refinance all
or a portion of our indebtedness,  including the notes on or before maturity. We
may not be able to refinance any of our indebtedness on commercially  reasonable
terms, or at all.

IF WE FAIL TO PAY OUR DEBT,  OUR LENDERS MAY SELL OUR LOANS TO SPRINT PCS GIVING
SPRINT PCS THE RIGHTS OF A CREDITOR TO FORECLOSE ON OUR ASSETS.

     If the  lenders  accelerate  the  amounts  due  under  our  secured  credit
facility,  Sprint  PCS has the right to  purchase  our  obligations  under  that
facility and become a senior  lender.  To the extent Sprint PCS purchases  these
obligations,  Sprint PCS'  interests  as a creditor  could  conflict  with ours.
Sprint PCS' rights as a senior  lender would  enable it to exercise  rights with
respect to our assets and Sprint PCS'  continuing  relationship  in a manner not
otherwise permitted under the Sprint PCS agreements.

IF SPRINT PCS TERMINATES THE SPRINT PCS  AGREEMENTS,  THE BUY-OUT  PROVISIONS OF
THOSE AGREEMENTS MAY DIMINISH THE VALUATION OF OUR COMPANY.

     Provisions  of the Sprint PCS  agreements  could affect our  valuation  and
decrease our ability to raise additional capital. If Sprint PCS terminates these
agreements,  Sprint PCS may purchase our  operating  assets or capital stock for
80%  of the  "Entire  Business  Value"  as  defined  by  the  agreement.  If the
termination  is due to our breach of the Sprint PCS  agreements,  the percent is


                                       28
<PAGE>

reduced to 72%  instead of 80%.  Under our  Sprint  PCS  agreements,  the Entire
Business  Value is  generally  the fair market  value of our  wireless  business
valued on a going concern basis as  determined by an  independent  appraiser and
assumes that we own the FCC licenses in our territory.  In addition,  Sprint PCS
must  approve  any  change  of  control  of our  ownership  and  consent  to any
assignment  of the Sprint PCS  agreements.  Sprint PCS also has a right of first
refusal if we decide to sell our operating assets in our Bright PCS markets.  We
are also  subject to a number of  restrictions  on the  transfer of our business
including a  prohibition  on selling our  company or our  operating  assets to a
number of  identified  and yet to be  identified  competitors  of Sprint  PCS or
Sprint.  These and other restrictions in the Sprint PCS agreements may limit the
marketability  of and  reduce  the price a buyer may be  willing  to pay for the
Company and may operate to reduce the Entire Business Value of the Company.

THE  TERMINATION  OF OUR  STRATEGIC  AFFILIATION  WITH SPRINT PCS OR SPRINT PCS'
FAILURE TO  PERFORM  ITS  OBLIGATIONS  UNDER THE  SPRINT  PCS  AGREEMENTS  WOULD
SEVERELY RESTRICT OUR ABILITY TO CONDUCT OUR BUSINESS.

     Because Sprint PCS owns the FCC licenses which we use in our territory, our
ability to offer Sprint PCS products and services on our network is dependent on
the Sprint PCS agreements  remaining in effect and not being terminated.  Sprint
PCS may  terminate  the Sprint PCS  agreements  for breach by us of any material
terms.  We also depend on Sprint PCS' ability to perform its  obligations  under
the Sprint PCS  agreements.  The termination of the Sprint PCS agreements or the
failure of Sprint PCS to perform its obligations under the Sprint PCS agreements
would   severely   restrict  our  ability  to  conduct  our   wireless   digital
communications business.

IF SPRINT PCS DOES NOT COMPLETE THE  CONSTRUCTION OF ITS NATIONWIDE PCS NETWORK,
WE MAY NOT BE ABLE TO ATTRACT AND RETAIN CUSTOMERS, WHICH WOULD ADVERSELY AFFECT
OUR REVENUES.

     Sprint PCS' network may not provide nationwide  coverage to the same extent
as its  competitors'  networks,  which  could  adversely  affect our  ability to
attract and retain  customers.  Sprint PCS is creating a nationwide  PCS network
through its own construction efforts and those of its affiliates. Today, neither
Sprint PCS nor any other PCS provider offers service in every area of the United
States. Sprint PCS has entered into affiliation  agreements similar to ours with
companies  in  other  territories  pursuant  to  its  nationwide  PCS  build-out
strategy.  Our business and results of operations depend on Sprint PCS' national
network and, to a lesser extent, on the networks of its other affiliates. Sprint
PCS and its affiliate program are subject,  in varying degrees, to the economic,
administrative,  logistical,  regulatory  and  other  risks  described  in  this
document.  Sprint  PCS' and its  other  affiliates'  PCS  operations  may not be
successful,  which in turn  could  adversely  affect  our  ability  to  generate
revenues.

WE ARE  DEPENDENT  UPON  SPRINT PCS' BACK OFFICE  SERVICES  AND ITS  THIRD-PARTY
VENDORS' BACK OFFICE  SYSTEMS.  PROBLEMS WITH THESE  SYSTEMS,  OR TERMINATION OF
THESE ARRANGEMENTS, COULD DISRUPT OUR BUSINESS AND POSSIBLY INCREASE OUR COSTS.

     Because  Sprint PCS now provides  our back office  systems such as billing,
customer care and  collections,  our operations could be disrupted if Sprint PCS
is unable to maintain  and expand its back office  services,  or to  efficiently
outsource  those services and systems  through  third-party  vendors.  The rapid
expansion of Sprint PCS' business will continue to pose a significant  challenge
to its  internal  support  systems.  Additionally,  Sprint  PCS  has  relied  on
third-party  vendors  for  a  significant  number  of  important  functions  and
components  of its  internal  support  systems and may continue to rely on these
vendors in the future. We depend on Sprint PCS' willingness to continue to offer
these  services to us and to provide these services at  competitive  costs.  The
Sprint PCS  agreements  provide that,  upon nine months'  prior written  notice,
Sprint  PCS may  elect  to  terminate  any of  these  services.  If  Sprint  PCS
terminates  a  service  for  which  we  have  not  developed  a   cost-effective
alternative,  our  operating  costs may  increase  beyond our  expectations  and
restrict our ability to operate successfully.

WE DEPEND ON OTHER  TELECOMMUNICATIONS  COMPANIES  FOR SOME SERVICES  WHICH,  IF
DELAYED,  COULD  DELAY OUR  PLANNED  NETWORK  BUILD-OUT  AND DELAY OUR  EXPECTED
INCREASES IN CUSTOMERS AND REVENUES.

                                       29
<PAGE>

     We depend on other  telecommunications  companies to provide facilities and
transport  to  interconnect  portions  of our network and to connect our network
with the landline telephone system.  American Electric Power,  Ameritech,  AT&T,
Verizon,  Sprint  (long  distance)  and  Qwest  are  our  primary  suppliers  of
facilities and transport.  Without these services, we could not offer Sprint PCS
services to our customers in some areas.  From time to time, we have experienced
delays in  obtaining  facilities  and  transport  from these  companies,  and in
obtaining local telephone numbers for use by our customers,  which are sometimes
in short supply,  and we may continue to experience  delays and interruptions in
the  future.  Delays in  obtaining  facilities  and  transport  could  delay our
build-out  plans and our  business  may  suffer.  Delays  could also result in a
breach of our Sprint PCS agreements,  subjecting  these  agreements to potential
termination by Sprint PCS.

IF WE DO NOT MEET ALL OF THE CONDITIONS  UNDER OUR SECURED CREDIT  FACILITY,  WE
MAY NOT BE ABLE TO DRAW  DOWN ALL OF THE  FUNDS  UNDER THE  FACILITY  AND,  AS A
RESULT,  WE MAY NOT BE ABLE TO COMPLETE THE BUILD-OUT OF OUR NETWORK,  WHICH MAY
RESULT IN THE TERMINATION OF THE SPRINT PCS AGREEMENTS.

     Our secured  credit  facility  provides for aggregate  borrowings of $250.0
million of which $155.0 million was borrowed as of March 31, 2002.  Availability
of future  borrowings  will be subject to customary  credit  conditions  at each
funding date, including the following:

     o    the absence of any default or event of default;

     o    the continuing accuracy of all representations and warranties; and

     o    no material adverse change.

     If we do not meet  these  conditions  at each  funding  date,  our  secured
lenders may choose not to lend any or all of the remaining amounts, and if other
sources of funds are not available,  we may not be in a position to complete the
build-out of our  network.  If we do not have  sufficient  funds to complete our
network  build-out,  we may be in breach of the  Sprint  PCS  agreements  and in
default under our senior secured credit facility.

     Horizon PCS' secured credit facility includes financial covenants that must
be met each  quarter.  We did not meet the  covenant  for  EBITDA  for the first
quarter of 2002. As a result of higher than expected  gross and net additions to
Horizon PCS subscribers for the quarter,  we incurred additional expenses to add
those customers.  Although we ultimately  benefit from the revenues generated by
new  subscribers,  we incur one-time  expenses  associated with new subscribers,
including  commissions,  handset  subsidies,  set up costs for the  network  and
marketing  expenses.  As a result,  these new subscriber costs negatively affect
EBITDA in the short-term  during the period of the addition of new  subscribers,
which led to  non-compliance  with the EBITDA  covenant for the first quarter of
2002.

     On May 8, 2002, we entered into a waiver  agreement  with our lending group
waiving this  non-compliance  with the covenant  through June 15, 2002.  We also
agreed  that until June 15,  2002,  we would not  borrow  funds  under our $95.0
million facility so long as our cash and cash equivalents  (excluding restricted
cash)  exceeds $10.0  million and that we would  maintain the $105.0  million in
loan proceeds recently received from the lending group in a separate account. We
are currently in  negotiations  with the bank group to obtain  amendments to the
covenants. We anticipate finalizing these amendments by June 15, 2002.

     The failure to comply with the covenant  was an event of default  under our
secured credit  facility,  and will give the lender the right to pursue remedies
if we are unable to agree on the  amendment  by June 15,  2002.  These  remedies
could  include  acceleration  of amounts due under the  facility.  If the lender
elected to  accelerate  the  indebtedness  under the  facility,  this would also
represent a default under the indentures of our senior notes and discount notes.
One option available to us would be to prepay the indebtedness under the secured
credit facility, together with prepayment fees. If we prepaid the facility prior


                                       30
<PAGE>

to  acceleration,  we would avoid  default under the  indentures  for our senior
notes and discount notes. In the event of such a prepayment,  we believe that we
could obtain replacement  financing to the extent necessary to fund our business
plan.  There can be no  assurance,  however,  that we could  obtain  adequate or
timely replacement financing on acceptable terms or at all.

MATERIAL  RESTRICTIONS  IN OUR DEBT  INSTRUMENTS MAY MAKE IT DIFFICULT TO OBTAIN
ADDITIONAL  FINANCING OR TAKE OTHER NECESSARY ACTIONS TO REACT TO CHANGES IN OUR
BUSINESS.

     The indenture  governing the senior notes contains  various  covenants that
limit our  ability  to engage in a variety of  transactions.  In  addition,  the
indenture  governing our discount  notes and the secured  credit  agreement both
impose  additional  material  operating and financial  restrictions on us. These
restrictions,  subject to  ordinary  course of  business  exceptions,  limit our
ability to engage in some transactions, including the following:

    o    designated types of mergers or consolidations;

    o    paying dividends or other distributions to our stockholders;

    o    making investments;

    o    selling assets;

    o    repurchasing our common stock;

    o    changing lines of business;

    o    borrowing additional money; and

    o    transactions with affiliates.

    In addition,  our secured credit  facility  requires us to maintain  certain
ratios, including:

    o    leverage ratios;

    o    an interest coverage ratio; and

    o    a fixed charges ratio,

    and to satisfy certain tests, including tests relating to:

    o    minimum covered population;

    o    minimum number of PCS subscribers in our territory; and

    o    minimum total revenues.

    o    minimum EBITDA.

    These  restrictions  could  limit  our  ability  to obtain  debt  financing,
repurchase  stock,  refinance or pay  principal  or interest on our  outstanding
debt,  consummate  acquisitions  for  cash or debt or react  to  changes  in our
operating environment. An event of default under the secured credit facility may
prevent the  Company and the  guarantors  of the senior  notes and the  discount
notes from paying those notes or the guarantees of those notes.

                                       31
<PAGE>

THE TERMS OF THE CONVERTIBLE PREFERRED STOCK MAY AFFECT OUR FINANCIAL RESULTS.

     The  terms of the  convertible  preferred  stock  give the  holders  of the
preferred stock the following principal rights:

     o    to initially designate two members of our board of directors,  subject
          to reduction based on future percentage ownership;

     o    to  approve  or   disapprove   fundamental   corporate   actions   and
          transactions;

     o    to  receive  dividends  in  the  form  of  additional  shares  of  our
          convertible  preferred stock, which may increase and accelerate upon a
          change in control; and

     o    to require us to redeem the convertible preferred stock in 2005.

     If we  become  subject  to  the  repurchase  right  or  change  of  control
redemption  requirements under the convertible preferred stock while our secured
credit facility, our discount notes or the senior notes are outstanding, we will
be  required  to seek the  consent  of the  lenders  under  our  secured  credit
facility,  the holders of the discount notes and the holders of the senior notes
to repurchase or redeem the convertible preferred stock, or attempt to refinance
the secured credit facility, the discount notes and the senior notes. If we fail
to obtain  these  consents,  there will be an event of  default  under the terms
governing our secured credit facility.  In addition,  if we do not repurchase or
redeem  the  convertible  preferred  stock and the  holders  of the  convertible
preferred  stock  obtain a judgment  against us, any  judgment in excess of $5.0
million would constitute an event of default under the indentures  governing the
discount notes and the senior notes.

IF WE  BREACH  OUR  AGREEMENT  WITH  SBA  COMMUNICATIONS  CORP.  ("SBA"),  OR IT
OTHERWISE  TERMINATES  ITS  AGREEMENT  WITH US,  OUR RIGHT TO  PROVIDE  WIRELESS
SERVICE FROM MOST OF OUR CELL SITES WILL BE LOST.

     We lease cell sites from SBA. We rely on our  contract  with SBA to provide
us with  access to most of our cell  sites and to the  towers  located  on these
sites. If SBA were to lose its underlying  rights to these sites, our ability to
provide  wireless  service  from these sites would end,  subject to our right to
cure defaults by SBA. If SBA terminates our agreement as a result of our breach,
we will lose our right to provide wireless services from most of our cell sites.

WE MAY HAVE DIFFICULTY IN OBTAINING INFRASTRUCTURE EQUIPMENT AND HANDSETS, WHICH
COULD RESULT IN DELAYS IN OUR NETWORK  BUILD-OUT,  DISRUPTION OF SERVICE OR LOSS
OF CUSTOMERS.

     If we cannot acquire the equipment required to build or upgrade our network
in a timely manner, we may be unable to provide wireless communications services
comparable to those of our competitors or to meet the requirements of the Sprint
PCS agreements.  Manufacturers  of this equipment could have  substantial  order
backlogs.  Accordingly,  the lead time for the delivery of this equipment may be
longer than  anticipated.  In  addition,  the  manufacturers  of specific  types
handsets may have to  distribute  their limited  supply of products  among their
numerous  customers.  Some  of our  competitors  purchase  large  quantities  of
communications  equipment  and  may  have  established  relationships  with  the
manufacturers of this equipment.  Consequently, they may receive priority in the
delivery  of this  equipment.  If we do not obtain  equipment  or  handsets in a
timely  manner,  we  could  suffer  delays  in the  build-out  of  our  network,
disruptions in service and a reduction in customers.

IF THE WEST  VIRGINIA PCS  ALLIANCE  AND  VIRGINIA PCS ALLIANCE  FAIL TO PROVIDE
THEIR NETWORK TO US IN THEIR MARKETS,  OR IF OUR NETWORK SERVICES AGREEMENT WITH
THE  ALLIANCES  IS  OTHERWISE  TERMINATED,  WE WILL LOSE THE  ABILITY TO USE THE
ALLIANCES' NETWORKS.

     West Virginia PCS Alliance and Virginia PCS Alliance,  which we refer to as
the  Alliances,  are two related,  independent  PCS  providers  whose network is
managed by NTELOS.  Under our network services agreement,  the Alliances provide


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<PAGE>

us with the use of and access to key  components of their network in most of our
markets in Virginia and West Virginia. We directly compete with the Alliances in
the markets where we use their  network.  If the Alliances  fail to maintain the
standards for their network as set forth in our network services  agreement with
them or  otherwise  fail to provide  their  network for our use,  our ability to
provide wireless services in these markets may be adversely affected, and we may
not be able to provide  seamless  service  for our  customers.  If we breach our
obligations  to the  Alliances,  or if the  Alliances  otherwise  terminate  the
network services agreement, we will lose our right to use the Alliances' network
to provide service in these markets. In that event, it is likely that we will be
required  to build our own network in those  markets  and incur the  substantial
costs associated with doing so.

SPRINT PCS' VENDOR  DISCOUNTS  MAY BE  DISCONTINUED,  WHICH COULD  INCREASE  OUR
EQUIPMENT  COSTS AND REQUIRE MORE CAPITAL THAN WE HAD  PROJECTED TO BUILD-OUT OR
UPGRADE OUR NETWORK.

     We intend to continue to purchase our infrastructure equipment under Sprint
PCS' vendor agreements that include significant volume discounts.  If Sprint PCS
were unable to continue to obtain vendor discounts for its affiliates,  the loss
of  vendor  discounts  could  increase  our  equipment  costs  for  our  network
build-out.

CONFLICTS WITH SPRINT PCS MAY NOT BE RESOLVED IN OUR FAVOR, WHICH COULD RESTRICT
OUR ABILITY TO MANAGE OUR BUSINESS AND PROVIDE SPRINT PCS PRODUCTS AND SERVICES,
ADVERSELY AFFECTING OUR RELATIONSHIPS WITH OUR CUSTOMERS,  INCREASE OUR EXPENSES
OR DECREASE OUR REVENUES.

     Under the Sprint PCS  agreements,  Sprint PCS has a  substantial  amount of
control over the conduct of our business. Conflicts between us may arise, and as
Sprint PCS owes us no duties  except as set forth in the Sprint PCS  agreements,
these  conflicts  may not be  resolved  in our favor.  The  conflicts  and their
resolution may harm our business. For example:

     o    Sprint PCS may price its  national  plans based on its own  objectives
          and may set price levels and customer  credit policies that may not be
          economically sufficient for our business;

     o    Sprint  PCS  may  increase  the  prices  we pay for  our  back  office
          services; and

     o    Sprint or Sprint PCS may make decisions that adversely  affect our use
          of the Sprint and Sprint PCS brand names, products or services.

WE MAY NOT BE ABLE TO COMPETE WITH LARGER,  MORE ESTABLISHED  WIRELESS PROVIDERS
WHO HAVE RESOURCES TO  COMPETITIVELY  PRICE THEIR  PRODUCTS AND SERVICES,  WHICH
COULD IMPAIR OUR ABILITY TO ATTRACT AND RETAIN CUSTOMERS.

     Our ability to compete will depend in part on our ability to anticipate and
respond  to  various  competitive   factors  affecting  the   telecommunications
industry,  including  new services that may be  introduced,  changes in consumer
preferences,  demographic  trends,  economic  conditions  and  discount  pricing
strategies by competitors. In each market, we compete with at least two cellular
providers that have had their  infrastructure in place and have been operational
for a number  of  years.  They  may have  significantly  greater  financial  and
technical  resources than we do, they could offer attractive pricing options and
they may have a wider variety of handset  options.  We expect existing  cellular
providers  will continue to upgrade their systems and provide  expanded  digital
services to compete with the Sprint PCS products and services we offer.  Many of
these  wireless  providers  generally  require  their  customers  to enter  into
long-term  contracts,  which  may  make  it  more  difficult  for us to  attract
customers away from them.

     We will  also  compete  with  several  PCS  providers  and  other  existing
communications  companies in our markets and expect to compete with new entrants
as the FCC licenses additional  spectrum to mobile services providers.  A number
of our cellular, PCS and other wireless competitors have access to more licensed
spectrum  than the amount  licensed to Sprint PCS in most of our  territory  and
therefore will be able to provide  greater network call volume capacity than our
network to the extent that network  usage begins to reach or exceed the capacity


                                       33
<PAGE>

of our licensed spectrum.  Our inability to accommodate increases in call volume
could result in more dropped or disconnected calls. In addition, any competitive
difficulties  that  Sprint PCS may  experience  could also harm our  competitive
position and success.

WE MAY NOT BE ABLE TO OFFER COMPETITIVE ROAMING  CAPABILITY,  WHICH COULD IMPAIR
OUR ABILITY TO ATTRACT AND RETAIN CUSTOMERS.

     We rely  on  agreements  with  competitors  to  provide  automatic  roaming
capability  to our PCS  customers in many of the areas of the United  States not
covered by the Sprint PCS network,  which primarily serves  metropolitan  areas.
Some competitors may be able to offer coverage in areas not served by the Sprint
PCS  network  or may be able to offer  roaming  rates  that are lower than those
offered by Sprint PCS and its affiliates. Some of our competitors are seeking to
reduce access to their networks through actions pending with the FCC.  Moreover,
the engineering standard for the dominant air interface upon which PCS customers
roam is  currently  being  considered  for  elimination  by the FCC as part of a
streamlining  proceeding.  If the FCC eliminates  this standard,  our Sprint PCS
customers may have difficulty roaming in some markets.

THERE IS NO UNIFORM SIGNAL TRANSMISSION TECHNOLOGY AND IF WE DECIDE TO USE OTHER
TECHNOLOGIES  IN THE FUTURE,  THIS  DECISION  COULD  SUBSTANTIALLY  INCREASE OUR
EQUIPMENT EXPENDITURES TO REPLACE THE TECHNOLOGY USED ON OUR NETWORK.

     The wireless  telecommunications industry is experiencing evolving industry
standards.  We have  employed  CDMA  technology,  which is the digital  wireless
communications  technology selected by Sprint PCS for its network.  CDMA may not
provide  the  advantages  expected by us and by Sprint PCS. In addition to CDMA,
there are two other principal signal  transmission  technologies,  time division
multiple access, or TDMA, and global systems for mobile communications,  or GSM.
These three signal transmission technologies are not compatible with each other.
If one of  these  technologies  or  another  technology  becomes  the  preferred
industry  standard,  we may be at a  competitive  disadvantage  and  competitive
pressures  may require  Sprint PCS to change its digital  technology  which,  in
turn, may require us to make changes at substantially increased costs.

WE MAY NOT RECEIVE AS MUCH SPRINT PCS ROAMING  REVENUE AS WE ANTICIPATE  AND OUR
NON-SPRINT PCS ROAMING REVENUE IS LIKELY TO BE LOW.

     We are paid a fee from  Sprint  PCS or a Sprint  PCS  affiliate  for  every
minute that a Sprint PCS  subscriber  based  outside of our  territory  uses our
network.  Similarly,  we pay a fee to Sprint PCS or a Sprint PCS  affiliate  for
every  minute  that  our  customers  use the  Sprint  PCS  network  outside  our
territory.  Our customers  may use the Sprint PCS network  outside our territory
more frequently than we anticipate, and Sprint PCS subscribers based outside our
territory may use our network less  frequently  than we anticipate.  The fee for
each Sprint PCS roaming  minute used was decreased  from $0.20 per minute before
June 1, 2001, to $0.15 per minute effective June 1, 2001, and further  decreased
to $0.12 per minute  effective  October 1, 2001. The Sprint PCS roaming rate was
changed to $0.10 per minute in 2002.  After 2002, the rate will be changed to "a
fair and reasonable return," which has not yet been determined.  As a result, we
may receive less Sprint PCS roaming revenue in the aggregate, than we previously
anticipated  or we may have to pay more Sprint PCS roaming fees in the aggregate
than  we  anticipate.  Furthermore,  we do not  expect  to  receive  substantial
non-Sprint PCS roaming revenue.

IF SPRINT PCS CUSTOMERS ARE NOT ABLE TO ROAM INSTANTANEOUSLY OR EFFICIENTLY ONTO
OTHER WIRELESS NETWORKS, WE MAY SUFFER A REDUCTION IN OUR REVENUES AND NUMBER OF
CUSTOMERS.

     The Sprint PCS network  operates at a different  frequency  and uses or may
use a different  signal  transmission  technology  than many analog cellular and
other digital systems. To access another provider's analog cellular, TDMA or GSM
digital  system when outside the territory  served by the Sprint PCS network,  a
Sprint  PCS  customer  is  required  to  utilize a  dual-band/dual-mode  handset
compatible with that provider's system. Generally,  because  dual-band/dual-mode
handsets incorporate two radios rather than one, they are more expensive, larger
and heavier than  single-band/single-mode  handsets. The Sprint PCS network does


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<PAGE>

not allow for call hand-off  between the Sprint PCS network and another wireless
network, so a customer must end a call in progress on the Sprint PCS network and
initiate a new call when outside the territory served by the Sprint PCS network.
In addition,  the quality of the service provided by a network provider during a
roaming call may not approximate  the quality of the service  provided by Sprint
PCS.  The price of a roaming  call may not be  competitive  with prices of other
wireless  companies for roaming calls,  and Sprint PCS customers may not be able
to use Sprint PCS  advanced  features,  such as  voicemail  notification,  while
roaming. These roaming issues may cause us to suffer a reduction in our revenues
and number of customers.

PARTS OF OUR TERRITORIES  HAVE LIMITED  LICENSED  SPECTRUM,  WHICH MAY ADVERSELY
AFFECT THE QUALITY OF OUR SERVICE.

     In the majority of our markets,  Sprint PCS has licenses covering 20 MHz or
30 MHz of spectrum.  However,  Sprint PCS has licenses  covering  only 10 MHz in
parts of our territory  covering  approximately  3.8 million  residents out of a
total population of over 10.2 million residents. In the future, as our customers
in those areas  increase in number,  this limited  licensed  spectrum may not be
able to accommodate  increases in call volume and may lead to increased  dropped
calls and may limit our  ability  to offer  enhanced  services.  NON-RENEWAL  OR
REVOCATION BY THE FCC OF THE SPRINT PCS LICENSES  WOULD  SIGNIFICANTLY  HARM OUR
BUSINESS  BECAUSE WE WOULD NO LONGER  HAVE THE RIGHT TO OFFER  WIRELESS  SERVICE
THROUGH OUR NETWORK.

     We are dependent on Sprint PCS' licenses,  which are subject to renewal and
revocation  by the FCC.  Sprint PCS'  licenses in many of our  territories  will
expire as early as 2005 but may be renewed for additional  ten-year terms. There
may be opposition to renewal of Sprint PCS' licenses upon their  expiration  and
the  Sprint  PCS  licenses  may not be  renewed.  The FCC has  adopted  specific
standards to apply to PCS license renewals.  For example, if Sprint PCS does not
demonstrate  to the FCC  that  Sprint  PCS has  met the  five-year  construction
requirements for each of its PCS licenses,  it can lose those licenses.  Failure
to comply with these  standards in our territory  could cause the  imposition of
fines on Sprint PCS by the FCC or the revocation or forfeiture of the Sprint PCS
licenses for our territory,  which would  prohibit us from providing  service in
our markets.




                                       35
<PAGE>

IF THE SPRINT PCS AGREEMENTS DO NOT COMPLY WITH FCC REQUIREMENTS, SPRINT PCS MAY
TERMINATE  THE SPRINT PCS  AGREEMENTS,  WHICH COULD  RESULT IN OUR  INABILITY TO
PROVIDE SERVICE.

     The FCC requires that licensees  like Sprint PCS maintain  control of their
licensed spectrum and not delegate control to third-party  operators or managers
like us.  Although the Sprint PCS  agreements  reflect an  arrangement  that the
parties  believe  meets the FCC  requirements  for licensee  control of licensed
spectrum,  we cannot be  certain  the FCC will agree with us. If the FCC were to
determine  that the Sprint PCS  agreements  need to be modified to increase  the
level of  licensee  control,  we have  agreed  with  Sprint  PCS to use our best
efforts to modify the Sprint PCS agreements to comply with applicable law. If we
cannot  agree with Sprint PCS to modify the Sprint PCS  agreements,  they may be
terminated. If the Sprint PCS agreements are terminated, we would no longer be a
part  of the  Sprint  PCS  network  and we  would  have  extreme  difficulty  in
conducting our business.

WE MAY NEED MORE CAPITAL THAN WE CURRENTLY  ANTICIPATE TO COMPLETE THE BUILD-OUT
AND UPGRADE OF OUR NETWORK,  AND A DELAY OR FAILURE TO OBTAIN ADDITIONAL CAPITAL
COULD DECREASE OUR REVENUES.

     The completion of our network build-out will require  substantial  capital.
Additional funds would be required in the event of:

     o    significant departures from our current business plan;

     o    unforeseen delays, cost overruns, unanticipated expenses; or

     o    regulatory, engineering design and other technological changes.

     For example,  it is possible that we will need substantial funds if we find
it necessary or desirable to overbuild the territory  currently  served  through
our  arrangements  with  the  Alliances.  Due to our  highly  leveraged  capital
structure,  additional financing may not be available or, if available,  may not
be obtained on a timely basis or on terms acceptable to us or within limitations
permitted  under our  existing  debt  covenants.  Failure  to obtain  additional
financing,  should  the  need  for it  develop,  could  result  in the  delay or
abandonment of our development and expansion plans, and we may be unable to fund
our ongoing operations.

BECAUSE  SPRINT PCS HAS  RECENTLY  REQUIRED US TO UPGRADE OUR NETWORK TO PROVIDE
"THIRD GENERATION" TECHNOLOGY, WE WILL FACE ADDITIONAL CAPITAL EXPENSES.

     The wireless  industry is seeking to implement new "third  generation,"  or
"3G,"  technology.  Sprint PCS has recently  selected a version of 3G technology
for its own  networks  and  required us to upgrade our network to provide  those
services. We currently estimate this network upgrade will cost approximately $35
million,  but actual costs could exceed this estimate.  The current deadline for
completion  of our 3G upgrade is June 30,  2002.  If we fail to meet the upgrade
deadline,  we will be in breach of our Sprint PCS agreements.  If other wireless
carriers  implement  their 3G upgrades on a more rapid  timetable,  or on a more
cost efficient  basis,  or on a more advanced  technology  basis, we will likely
suffer  competitive  disadvantages  in our  markets.  While there are  potential
advantages with 3G technology, such as increased network capacity and additional
capabilities for wireless data applications,  the technology has not been proven
in  the  marketplace   and  has  the  risks  inherent  in  other   technological
innovations.

UNAUTHORIZED  USE OF OUR  NETWORK  AND OTHER  TYPES OF FRAUD  COULD  DISRUPT OUR
BUSINESS AND INCREASE OUR COSTS.

     We will likely  incur costs  associated  with the  unauthorized  use of our
network,  including  administrative and capital costs associated with detecting,
monitoring  and reducing the incidence of fraud.  Fraud impacts  interconnection
costs, capacity costs, administrative costs, fraud prevention costs and payments
to other carriers for unbillable fraudulent roaming. Although we believe we have
a plan in place to implement  appropriate  controls to minimize the effect to us
of fraudulent usage, our efforts may not be successful.



                                       36
<PAGE>


EXPANDING OUR TERRITORY MAY HAVE A MATERIAL ADVERSE EFFECT ON OUR BUSINESS.

     As part of our business  strategy,  we may expand our territory through the
grant of  additional  markets from Sprint PCS or through  acquisitions  of other
Sprint PCS affiliates.  We will evaluate  strategic  acquisitions  and alliances
principally  relating to our current operations.  These transactions may require
the approval of Sprint PCS and commonly involve a number of risks, including:

     o    difficulty assimilating acquired operations and personnel;

     o    diversion of management attention;

     o    disruption of ongoing business;

     o    inability to retain key personnel;

     o    inability to successfully  incorporate acquired assets and rights into
          our service offerings;

     o    inability to maintain  uniform  standards,  controls,  procedures  and
          policies; and

     o    impairment of relationships with employees, customers or vendors.

     Failure to overcome these risks or any other problems  encountered in these
transactions could have a material adverse effect on our business. In connection
with these transactions,  we may also issue additional equity securities,  incur
additional debt.

THE SPRINT PCS AGREEMENTS AND OUR RESTATED CERTIFICATE OF INCORPORATION  INCLUDE
PROVISIONS  THAT MAY  DISCOURAGE,  DELAY OR RESTRICT  ANY SALE OF OUR  OPERATING
ASSETS OR COMMON STOCK TO THE POSSIBLE DETRIMENT OF OUR NOTEHOLDERS.

     The Sprint PCS agreements restrict our ability to sell our operating assets
and common stock. Generally,  Sprint PCS must approve a change of control of our
ownership and consent to any assignment of the Sprint PCS agreements. The Sprint
PCS  agreements  also give  Sprint PCS a right of first  refusal if we decide to
sell the  operating  assets of our  Bright  PCS  markets  to a third  party.  In
addition,  provisions of our restated  certificate of  incorporation  could also
operate to  discourage,  delay or make more difficult a change in control of our
company. For example, our restated certificate of incorporation provides for:

     o    two classes of common stock,  with our class B common stock having ten
          votes per share;

     o    the issuance of preferred stock without stockholder approval; and

     o    a classified board, with each board member serving a three-year term.

     The  restrictions  in the Sprint PCS  agreements  and the provisions of our
restated certificate of incorporation could discourage any sale of our operating
assets or common stock.

WE WILL NOT BE ABLE TO RECEIVE THE TAX BENEFIT OF FUTURE  LOSSES  UNTIL WE BEGIN
TO GENERATE TAXABLE INCOME.

     From  our  inception   until  September  2000,  we  were  included  in  the
consolidated  Federal  income tax return of Horizon  Telcom,  Inc.  which owns a
majority of our outstanding common stock.  Under the tax-sharing  agreement with
Horizon  Telcom,  Horizon Telcom filed a consolidated  tax return and paid us an
amount  equal to the tax savings  realized by Horizon  Telcom as a result of our
taxable operating losses being used to offset consolidated  taxable income. As a
result of the sale of convertible  preferred  stock in September 2000, we are no


                                       37
<PAGE>

longer included in Horizon  Telcom's  consolidated  tax return and, as a result,
will no longer be able to recognize any tax benefits  from our operating  losses
until we generate taxable income.

HORIZON  TELCOM  WILL BE ABLE TO  CONTROL  THE  OUTCOME OF  SIGNIFICANT  MATTERS
PRESENTED TO  STOCKHOLDERS  AS A RESULT OF ITS OWNERSHIP  POSITION,  WHICH COULD
POTENTIALLY IMPAIR OUR ATTRACTIVENESS AS A TAKEOVER TARGET.

     Horizon Telcom  beneficially  owns  approximately  58.1% of our outstanding
common  stock on fully  diluted  basis as of March 31, 2002.  In  addition,  the
shares  held by  Horizon  Telcom  are class B shares,  which  have ten votes per
share.  The class A shares  have only one vote per share.  As a result,  Horizon
Telcom holds approximately 84.5% of the voting power on a fully diluted basis at
March 31,  2002.  Horizon  Telcom  will have the  voting  power to  control  the
election of our board of directors  and it will be able to cause  amendments  to
our restated certificate of incorporation or our restated bylaws. Horizon Telcom
also may be able to cause changes in our business  without  seeking the approval
of any other party.  These changes may not be to the advantage of our company or
in the best interest of our other  stockholders or the holders of our notes. For
example,  Horizon Telcom will have the power to prevent, delay or cause a change
in control of our company and could take other  actions  that might be favorable
to Horizon Telcom, but not necessarily to other stockholders.  This may have the
effect of  delaying or  preventing  a change in control.  In  addition,  Horizon
Telcom is  controlled  by members of the McKell  family,  who  collectively  own
approximately  60.6% of the voting interests of Horizon Telcom.  Therefore,  the
McKell family,  acting as a group, may be able to exercise indirect control over
us.

WE MAY FACE  CONFLICTS  OF  INTEREST  WITH  HORIZON  TELCOM  WHICH  MAY HARM OUR
BUSINESS.

     Conflicts of interest may arise between us and Horizon Telcom, or its other
affiliates,  in  areas  relating  to past,  ongoing  and  future  relationships,
including:

     o    corporate opportunities;

     o    tax and intellectual property matters;

     o    potential acquisitions;

     o    financing transactions,  sales or other dispositions by Horizon Telcom
          of shares of our common stock held by it; and

     o    the  exercise  by  Horizon  Telcom  of  its  ability  to  control  our
          management and affairs.

     Horizon  Telcom  controls  approximately  84.5% of the voting  power of our
shares on a fully diluted basis. Horizon Telcom is engaged in a diverse range of
telecommunications-related  businesses,  such as local  telephone  services  and
Internet  services,  and these  businesses  may have  interests that conflict or
compete in some manner with our business.  Horizon Telcom is under no obligation
to share any  future  business  opportunities  available  to it with us,  unless
Delaware law requires it to do so. Any  conflicts  that may arise between us and
Horizon Telcom or any of its affiliates or any loss of corporate  opportunity to
Horizon  Telcom that may  otherwise be available to us may impact our  financial
condition or results of operations because these conflicts of interest or losses
of corporate  opportunities  could result in a loss of customers and, therefore,
business.  Because  Horizon  Telcom  will be able to control the outcome of most
conflicts upon which stockholders could vote and because it will have the voting
power to control our board of  directors,  conflicts  may not be resolved in our
favor.

PRESENT AND FUTURE  TRANSACTIONS  WITH HORIZON  TELCOM MAY BE ON TERMS WHICH ARE
NOT AS FAVORABLE AS COULD BE OBTAINED FROM THIRD PARTIES.

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<PAGE>

     In the  past,  we  have  entered  into  transactions  with  Horizon  Telcom
including  the leasing of towers by Horizon  Telcom to us and the  advancing  of
cash  to  us to  finance  our  operations.  In  addition,  Horizon  Services,  a
subsidiary of Horizon Telcom  provides  administrative  services to us including
finance and accounting services,  computer access and human resources.  Although
these  transactions  were on terms that we  believe  are fair,  because  Horizon
Telcom  currently owns 58.1% of our outstanding  common stock on a fully diluted
basis,  third-parties  with  which  we  wish to  enter  into  agreements  or the
marketplace in general may not perceive these  transactions  with Horizon Telcom
to be fair.  In addition,  because  Horizon  Telcom has the power to control our
board  of  directors,  we may not be able to  renew  these  agreements  on terms
favorable to us.

WE MAY  EXPERIENCE A HIGH RATE OF CUSTOMER  TURNOVER,  WHICH WOULD  INCREASE OUR
COSTS OF OPERATIONS AND REDUCE OUR REVENUE AND PROSPECTS FOR GROWTH.

     Our strategy to minimize  customer  turnover,  commonly known as churn, may
not be  successful.  As a result  of  customer  turnover,  we lose  the  revenue
attributable  to these  customers  and  increase the costs of  establishing  and
growing our customer  base.  The PCS industry has  experienced  a higher rate of
customer  turnover  as  compared  to  cellular  industry  averages.  The rate of
customer turnover is affected by the following factors, several of which are not
within our ability to address:

     o    extent of network coverage;

     o    reliability  issues such as blocked  calls,  dropped calls and handset
          problems;

     o    non-use of phones;

     o    change of employment;

     o    a lack of affordability;

     o    price competition;

     o    Sprint PCS' customer credit policies;

     o    customer care concerns; and

     o    other competitive factors.

     A high rate of customer  turnover could  adversely  affect our  competitive
position,  results  of  operations  and our costs of,  or  losses  incurred  in,
obtaining new customers, especially because we subsidize some of the cost of the
handsets purchased by our customers.

BECAUSE THE WIRELESS  INDUSTRY HAS  EXPERIENCED  HIGHER  CUSTOMER  ADDITIONS AND
HANDSET  SALES IN THE FOURTH  CALENDAR  QUARTER AS  COMPARED  TO THE OTHER THREE
CALENDAR  QUARTERS,  A FAILURE BY US TO ACQUIRE  SIGNIFICANTLY MORE CUSTOMERS IN
THE FOURTH QUARTER COULD HAVE A DISPROPORTIONATE  NEGATIVE EFFECT ON OUR RESULTS
OF OPERATIONS.

     The wireless industry is historically  dependent on fourth calendar quarter
results. Our overall results of operations could be significantly  reduced if we
have a worse than expected fourth calendar quarter for any reason, including the
following:

     o    our inability to match or beat pricing plans offered by competitors;

     o    our failure to adequately  promote Sprint PCS' products,  services and
          pricing plans;


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<PAGE>

     o    our inability to obtain an adequate supply or selection of handsets;

     o    a  downturn  in the  economy  of  some  or all of the  markets  in our
          territory; or

     o    a generally poor holiday shopping season.

REGULATION BY GOVERNMENT AGENCIES MAY INCREASE OUR COSTS OF PROVIDING SERVICE OR
REQUIRE US TO CHANGE OUR SERVICES, WHICH COULD IMPAIR OUR FINANCIAL PERFORMANCE.

     The  licensing,  construction,  use,  operation,  sale and  interconnection
arrangements  of wireless  telecommunications  systems are  regulated to varying
degrees by the FCC, the Federal Aviation  Administration  and,  depending on the
jurisdiction,  state and  local  regulatory  agencies  and  legislative  bodies.
Adverse  decisions  regarding these  regulatory  requirements  could  negatively
impact our operations and our cost of doing business.

USE OF HAND-HELD  PHONES MAY POSE HEALTH RISKS,  REAL OR PERCEIVED,  WHICH COULD
RESULT IN THE  REDUCED USE OF OUR  SERVICES OR  LIABILITY  FOR  PERSONAL  INJURY
CLAIMS.

     Media reports have suggested that radio  frequency  emissions from wireless
handsets may be linked to various health  problems,  including  cancer,  and may
interfere with various  electronic  medical devices,  including hearing aids and
pacemakers.  Concerns  over radio  frequency  emissions  may  discourage  use of
wireless handsets or expose us to potential  litigation.  Any resulting decrease
in demand for our services,  or costs of  litigation  and damage  awards,  could
impair our ability to profitably operate our business.


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(A)      EXHIBITS

Exhibit No.    Description
-----------    -----------
3.1*      Amended and Restated Certificate of Incorporation of Horizon PCS.
3.2*      Bylaws of Horizon PCS.
10.40.3   Waiver  Agreement  dated  May  9,  2002 by and among Horizon  Personal
          Communications,  Inc. (the "Company"),  Bright Personal Communications
          Services,  LLC, an Ohio limited liability company  ("Bright") (each of
          the Company and Bright,  individually a "Borrower"  and  collectively,
          the  "Borrowers"),  Horizon  PCS,  Inc., a Delaware  corporation  (the
          "Parent"),  those  Subsidiaries  of the Parent listed on the signature
          pages hereto (together with the Parent, individually a "Guarantor" and
          collectively  the  "Guarantors";  the  Guarantors,  together  with the
          Borrowers,  individually a "Credit Party" and collectively the "Credit
          Parties"),  the  lenders  party  hereto (the  "Lenders"),  First Union
          National Bank, as Administrative Agent (the  "Administrative  Agent"),
          Westdeutsche  Landesbank   Girozentrale,   as  Syndication  Agent  and
          Arranger (the  "Syndication  Agent"),  and Fortis  Capital  Corp.,  as
          Documentation Agent (the "Documentation Agent")

-------------
*    Incorporated  by reference  to the exhibit with the same number  previously
     filed by the Registrant on Form S-4 (Reg. No. 333- 51238).

(B)  REPORTS ON FORM 8-K

     1.   On March 1, 2002,  we filed a Current  Report on Form 8-K with the SEC
          that  provided   information  under  "ITEM  5  -  Other   Information"
          disclosing we issued a press release  announcing our financial results
          for the fourth  quarter and fiscal year ended  December 31, 2001,  and
          another press release announcing the appointment of Alan G. Morse to a
          newly created position of Chief Operating Officer.

     2.   On March 4, 2002,  we filed a Current  Report on Form 8-K with the SEC
          that provided  information  under "ITEM 9 - Regulation FD  Disclosure"
          disclosing   we   made   a    presentation    at   the   CSFB   Global
          Telecommunications CEO Conference in Orlando, Florida.




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<PAGE>

                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersign thereunto duly authorized

                                        HORIZON PCS, INC.
                                        Registrant


Date: May 14, 2002                      By: /s/  William A. McKell
                                        ----------------------------------------
                                        William A. McKell
                                        Chief Executive Officer


Date: May 14, 2002                      By: /s/  Peter M. Holland
                                        ----------------------------------------
                                        Peter M. Holland
                                        Chief Financial Officer
                                        (Principal Financial and Chief
                                        Accounting Officer)






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